European markets start the day higher ahead of US mega cap earnings

European indices are trading higher on Tuesday following a positive US session which saw the S&P 500 and Dow Jones reach new all-time highs as the Wall Street earnings season picks up. As the earning season continues, focus this week is on mega-cap companies publishing their Q3 earnings report and after Facebook released slightly disappointing results yesterday, the company announced a $50 billion boost to its share buyback program. Today, investors will receive Alphabet, Microsoft and Twitter earnings and while it is unlikely there will be major surprises, these reports could have a widespread impact on markets due to their weighting and their potential influence on overall sentiment. Nevertheless, the tech sector has been one of the most resilient throughout the pandemic and today's earnings will allow investors to assess how some of these major companies have dealt with the last several months of instability and uncertainty in markets. 

Oil prices retreat after reaching multi year highs

While energy prices continue to be volatile due to increases in demand and widespread supply shortages, oil producers remain firm on their decision to not increase output for the time being. This situation has led Oil prices to reach new multi year highs with WTI breaking through the $85 mark and reaching the highest level since 2014. Despite the situation being uncertain, expectations of a recovery in demand continue to drive prices higher which is having consequences on the economy as a whole due to the impact energy costs have. Today’s API inventory report from the US could lead to some volatility in Oil prices especially if there are any major surprises ahead of next week's OPEC meeting.