Strong earnings and macroeconomic conditions are driving stocks higher

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Markets rise due to positive earnings
U.S. stocks continued their rise on Wednesday as earnings from Morgan Stanley and United Airlines beat estimates. Asia Pacific markets traded mixed on Thursday. The CSI 300 real estate index fell almost 7% despite Beijing announcing new measures to support the industry.

Follow the ECB’s decision time live
Market observers expect the European Central Bank to cut interest rates by 25 basis points at its meeting today. If this forecast comes true, it would be the ECB’s third interest rate cut this year. Follow today’s action on Decision Time, CNBC’s live show analyzing the decision, from 1pm BST.

New support measures for real estate
China’s housing ministry said on Thursday it will expand its “whitelist” initiative to all commercial housing projects, aimed at completing the construction of unfinished houses. The ministry also announced that bank lending to developers will be accelerated, nearly doubling the already approved 2.23 trillion yuan to 4 million trillion yuan by the end of 2024.

Possible investigation by Intel
Intel may face a security review by the Cybersecurity Association of China. Officials claim that Intel’s CPU chips have vulnerabilities in security management and deficiencies in product quality. CSAC also accused Intel of using remote management features to monitor users.

[PRO] A brilliant sector that is neither technology nor utilities
Stocks of major technology companies, fueled by excitement over generative artificial intelligence, accounted for most of this year’s market rally. Gen AI is powered by energy-hungry data centers, benefiting the utility sector. But there’s a new group of stocks that is quickly becoming one of the best-performing sectors of the year.

Wednesday’s drop in the stock market was short-lived, like a marathon runner taking a break to have a drink before setting off again.

“Yesterday’s weakness does not alter medium- and long-term uptrends, and we believe it will only prove to be a pullback within a longer-term uptrend,” Piper Sandler said in a note.

After the Dow Jones Industrial Average rose 0.79% on Wednesday, breaking that barrier again and closing at 43,077.70.

The S&P 500 climbed 0.47% and the Nasdaq Composite 0.28% added.

The markets are shining in the glow of a positive earnings season so far. About 80% of the 50 S&P companies that reported earnings beat expectations, according to FactSet data.

Morgan Stanleyfor one, reported third-quarter numbers that beat profit and revenue estimates. The bank’s profit rose 32% year over year, easily beating the LSEG estimate and outpacing the income growth of several other major banks.

The investment banking business was a major source of profit for Morgan Stanley. With the support of the Federal Reserve as it begins its interest rate cutting cycle, initial public offerings and mergers and acquisitions are emerging from hibernation and revitalizing Wall Street banks.

Morgan Stanley rose 6.5% after the results. The SPDR S&P Bank ETF is up more than 6% in the last five trading days. In another sign the rally is extending, the bank ETF has outperformed the S&P 500’s gain of less than 1% over the same period.

“We assume that the macroeconomic environment and the earnings environment will remain favorable,” says UBS, “which supports remaining invested in stocks.”

With monetary easing, a continued strong economy and cooling inflation – import prices fell 0.4% in September, according to the U.S. Labor Department – stocks appear to have the staying power to continue rising.

— CNBC’s Hugh Son, Alex Harring, Jeff Cox, Lisa Kailai Han and Jesse Pound contributed to this story.