Traders Edge – Wednesday 15th August

Wall Street’s three major indexes have risen with the S&P 500 posting its strongest gain in three weeks as a string of healthy earnings boosted investor optimism and a rebound in the Turkish lira eased fears of a broader financial contagion.

Gains were widespread on Tuesday, and the S&P 500 and the Dow Jones Industrial Average ended four-day losing streaks. The Turkish lira regained some ground a day after it plunged to an all-time low. The rebound came as the country’s central bank took steps to ease pressure on the currency. Shares of major US banks reversed course on easing Turkey fears, with the S&P financial sector closing the session up 0.9 per cent.

Investors also focused on second-quarter results, as the reporting season draws closer to the finish line. So far, of 458 companies in the S&P 500 that have posted results, 79 per cent have topped Wall Street estimates. “What we’ve seen thus far this year, is that rising earnings estimates have really been the driving factor behind (market) performance,” said Bill Northey, senior vice president at US Bank Wealth Management in Helena, Montana. “There’s this broad constructive fundamental backdrop, and some of the macro geopolitical factors are just receiving a little bit of relief today,” Northey added.