bank of america

  • Prior underperforming US banks rallied last week where the SPDR Banks ETF rose by 6.76%, its best weekly gain seen in 14 months.
  • The high growth technology concentrated Nasdaq 100, the top year-to-date performer, underperformed last week, dragged down by Tesla and Netflix ex-post earnings releases.
  • Extreme positioning, and complacency bias in Nasdaq 100 increase the risk of a medium-term bearish reversal in technology stocks.

 

In the past two weeks, we have seen the latest Q2 earnings releases of the major US banks; JP Morgan, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, Morgan Stanley, and one of the high-flying technology-related “Magnificent Seven”, Tesla as well as a Netflix. All the major banks beat earnings expectations except Goldman Sachs, but its disappointing earnings had been well-telegraphed by senior management in public speeches ahead of its result release.

Both Tesla and Netflix have managed to beat their bottom lines too. Interestingly, their r

Bank of America Doesn't Approve Bitcoin, Which By The Way Decreased By 1.3% Yesterday

Bank of America Doesn't Approve Bitcoin, Which By The Way Decreased By 1.3% Yesterday

Alex Kuptsikevich Alex Kuptsikevich 11.02.2022 08:53
Cryptocurrencies were under the pressure of strong data on inflation in the United States on Thursday, which has updated 40-year highs. Such values can force the Fed to raise interest rates faster, which is negative for all risky assets, including cryptocurrencies. Bitcoin showed high volatility during trading, updating early January highs above $45,800 under the influence of a weakening dollar. However, towards the end of the day, the first cryptocurrency began to decline along with stock indices: the S&P500 lost 1.8%, the high-tech Nasdaq fell 2.1%. The crypto-currency index of fear and greed for the second day is exactly in the middle of the scale, at around 50 (neutral). However, now the stock markets are having an increased impact on the dynamics of Bitcoin and Ethereum, in which the prospects for monetary policy are being reassessed. The corresponding index is now in the fear territory, near the 37 mark. Meanwhile, Bitcoin is being bought back on dips towards the 50-day average, which keeps the picture bullish. However, in the event of a prolonged sale of shares, the first cryptocurrency will not hold and risks pulling the entire market with it. Fitch has downgraded El Salvador due to its acceptance of bitcoin as legal tender. In March, the country will issue the first $1 billion bitcoin bonds. There is interesting news from America as well. The largest investment company BlackRock is going to launch a cryptocurrency trading service. Bank Of America refuses to recognize Bitcoin as a safe-haven asset, pointing to the strengthening of the correlation between BTC and the S&P500 stock index. And at JPMorgan, they currently consider the “fair” quote for bitcoin to be $38,000. In Russia, the government has completed the drafting of a bill on the circulation of digital currencies. The Ministry of Finance proposed establishing a transitional period for individuals before introducing a tax on income from crypto assets. Overall, Bitcoin lost 1.3% on Thursday, ending the day around $44,100. Ethereum fell 4.3%, while other top ten altcoins declined from 0.5% (Avalanche) to 6.2% (Solana and Polkadot). The total capitalization of the crypto market sank by 2.8% over the day, to $2.08 trillion. Altcoins showed a leading decline, which led to an increase in the Bitcoin dominance index by 0.5%, to 40.1%
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

GBP: BoE Expected to Raise Yields, US Dollar (USD) Strengthens across the board - Good Morning Forex!

Rebecca Duthie Rebecca Duthie 02.05.2022 09:24
Summary: USD Trumps all other currencies on the forex market today. SNB Sticks to loose monetary policy. BoE expected to raise treasury yields. EUR weakens further over the weekend. Since the market opened today the EURO has weakened against the USD. The USD strengthening comes with expectations of the hawkish Fed pushing U.S yields higher in May, this comes in the fight against the highest inflation the US has seen in 40 years. In addition, the European Central Bank is not expected to increase yields until their Asset Purchasing Program (APP) comes to a close. The current market sentiment is mixed for this major currency pair. EUR/USD Price Chart   Read next: US Dollar (USD) Continues To Trump The EUR, BoE Expected To Increase Interest Rates, SNB Remains Dovish, South African Rand (ZAR) Performance    Mixed market sentiment for EUR/GBP. GBP weakens against the EURO today. The Eurozone and Germany are expected to announce their GDP figures this week which could likely improve investor sentiment in the EURO. The market sentiment for this currency pair is mixed, this comes as the lockdowns in China and the Russia-Ukraine conflict are current aspects that affect both of these currencies. EUR/GBP Price Chart Swiss National Bank Sticks to their loose monetary policy. The USD strengthening against the CHF comes in anticipation of the Fed further increasing U.S yields in May. The Swiss National Bank (SNB) is not budging on their loose monetary policy amidst beliefs that this period of high inflation is temporary, causing the Swiss Franc to weaken. USD/CHF Price Chart Bank of England (BoE) expected to raise yields. Since the market opened this morning, the market sentiment for this currency pair is bullish. Although the price is decreasing, the bullish sentiment comes with expectations that the Bank of England (BoE) will announce an increase in treasury yields by 25 basis points at Thursday's announcements. The Fed is also expected to raise yields, this is causing the price to show volatility. GBP Price Chart   Read next: Euro (EUR) Continues To Weaken Against The US Dollar (USD), Euro Under Pressure Amidst Russia’s Decision To Tighten Gas Supplies. GBP Strengthens Against the JPY.    Sources: fxstreet.com, Finance.yahoo.com, dailyfx.com.
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

What are investors afraid of? | Conotoxia

Conotoxia Comments Conotoxia Comments 18.05.2022 15:42
As it does every month, Bank of America conducts a survey of fund managers with nearly $900 billion AUM. Its results in the May edition seem very interesting, indicating the risks and actions of institutional investors. According to the survey, investors appear to be hoarding cash as the outlook for global economic growth falls to an all-time low and fears of stagflation increase. Cash holdings among investors have reached their highest level since September 2001, according to the report. A survey this month of investors managing $872 billion also found that hawkish central banks are seen as the biggest risk to financial markets. A global recession came in second, and concerns about stagflation rose to their highest level since 2008. The findings could show an uninspiring outlook for global equities, which are already on track for their longest weekly losing streak since the global financial crisis, as central banks turn off the tap on money at a time of stubbornly high inflation. The BofA report said the stock market may be in a bear market, but the final lows have not yet been reached. More interest rate hikes by the Federal Reserve are still expected, and the market is not yet in full capitulation. The BofA survey also found that technology stocks are under the most pressure since 2006. Overall, investors were most attuned to holding cash, and are least inclined to go for: emerging market stocks, eurozone stocks and bonds at the moment. The report also found that the so-called most crowded trades at the moment are long positions on oil (28%), short positions on U.S. Treasury bonds (25%), long on technology stocks (14%), and long on bitcoin (8%). According to the respondents, the value to which the S&P 500 index would have to fall for the Fed to start refraining from further monetary policy tightening falls at the level of 3529, i.e. about 12% below the current level. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Serious liquidity crisis? According to Franklin Templeton, a massive, but unlikely deposit flight from Credit Suisse would have to happen

Fears Of A Global Recession Strengthen (EUR/USD), Expectations More Hawkish BoE (EUR/GBP), CHF Was The Best Performing Currency Last Week (EUR/CHF), NZD/USD

Rebecca Duthie Rebecca Duthie 20.06.2022 13:48
Summary: Swiss Franc could be the most appealing safe-haven currency right now. Fears of a high level of striking in the United Kingdom. Russia under-delivers on its gas obligations to some European countries. Read next: Eurozone Inflation Data Offering Euro Support (EUR/USD, EUR/GBP), SNB 0.5% Interest Rate Hike Bombshell (EUR/CHF), BoJ Left Monetary Policy Unchanged (USD/JPY)  EUR/USD The market is reflecting mixed signals for this currency pair. In general there are fears of a global economic recession, this fear is affecting the foreign exchange markets. Russia cut some of its exports in gas to Germany, Italy and France, which foreshadows an increase in gas prices and possibly a complete stop to gas flows. If this occurs, expectations of a euro area recession is likely and will add to further inflation in Europe. All of these factors are driving the price of the EUR/USD currency pair. EUR/USD Price Chart EUR/GBP The market is reflecting bearish signals for this currency pair. Fears of a high level of striking in the United Kingdom is putting the Bank of England (BoE) under pressure to hike interest rates at a rate faster than economists expectations. Expectations of a more hawkish BoE is offering the pound sterling support against the Euro. EUR/GBP Price Chart The SNB’s surprise interest rate hike offered the CHF support The market is reflecting mixed signals for this currency pair. The CHF was the best performing currency during the trading week last week as the Swiss National Bank (SNB) surprised the market with a 50 basis point hike in interest rates. This move was the first of its kind in 15 years and offered the Swiss Franc support, and made the currency the most appealing safe-haven currency. EUR/CHF Price Chart NZD/USD The market is reflecting bearish signals for this currency pair. The New Zealand Dollar has lost momentum as expectations of a hawkish Reserve Bank of New Zealand (RBNZ) fade and Oil prices rise. Global markets continue to struggle amidst rising energy prices and hawkish central banks everywhere. NZD/USD Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

ECB’s Christine Lagarde Eased Fears (EUR/USD, EUR/CHF), Expectations Of A More Hawkish BoE Strengthen (EUR/GBP, GBP/USD)

Rebecca Duthie Rebecca Duthie 21.06.2022 15:46
Summary: President Joe Biden announced he is considering a gas tax holiday. Markets expect a more hawkish BoE, thus offering the pound sterling support. CHF is supported by the SNB's hawkish attitude. Read next: BoE’s Dr Catherine L Mann Speaks  EUR/USD currency pair The market is reflecting bullish signals for this currency pair. US President Joe Biden has announced that he may be considering imposing a gas tax holiday in an attempt to ease inflationary pressure on the US consumer. This looser fiscal policy move could help the Monetary policy tightening moves by the Federal Reserve by adding more flexibility and optionality in its fight against inflation. Theoretically speaking, looser fiscal policy encourages more foreign investment, and thus a higher US Dollar demand. This mixed with a hawkish Federal Reserve could give an extra boost to the US Dollar if the tax cut is approved. During her speech yesterday, European Central Bank (ECB) president Christine Lagarde managed to ease fears via her statement around the ECB’s proactive fight against fragmentation, thereby offering the Euro support. EUR/USD Price Chart BoE expected to accelerate their interest rate hiking path The market is reflecting bearish signals for this currency pair. Analysts at Goldman Sachs and Deutsche Bank say they expect the Bank of England (BoE) to accelerate the rate in which they will raise interest rates. The BoE indicated they would be more inclined to take a more stern stance on inflation, even at the expense of growth. Therefore, giving the markets expectation of a more hawkish BoE, and offering the pound sterling support. EUR/GBP Price Chart SNB’s move to raise interest rates offers CHF support The market is reflecting bearish signals for this currency pair. Despite European Central Bank’s (ECB) Christine Lagarde easing fears around fragmentation, the Swiss Franc is still showing strength against the Euro. Last week the Swiss National Bank (SNB) surprised the markets with a 50 basis point rate hike in its interest rates, which offered the safe-haven currency support. The Swiss Franc was the best performing currency last week. EUR/CHF Price Chart Looming recessions and slowing economies The market is reflecting bullish signals for this currency pair. The pound sterling was edging higher during early trading on Tuesday despite negatives hanging over the GBP. On Wednesday, the UK is expected to release headline inflation data, which is expected to come in at 9.1%, which may even come in higher. In addition, the fears of a slowing UK economy and a global recession are only 2 of the factors that are weighing on this currency pair and on many other foreign exchange pairs. GBP/USD Price Chart Sources: dailyfx.com, finance.yahoo.com, poundsterlinglive.com
The Loonie Pair (USD/CAD) Takes Clues From The Downbeat Oil Prices

Fears Of Recession Loom (EUR/USD), UK CPI Inflation Data 9.1% For May (EUR/GBP), Surprisingly Strong Canadian Inflation Data (USD/CAD), EUR/JPY

Rebecca Duthie Rebecca Duthie 22.06.2022 16:27
Summary: UK CPI inflation data came in at 9.1% for May. BoJ remaining dovish. Fears of a recession loom. Read next: ECB’s Christine Lagarde Eased Fears (EUR/USD, EUR/CHF), Expectations Of A More Hawkish BoE Strengthen (EUR/GBP, GBP/USD)  ECB could benefit from QEQT combination The market is reflecting bullish signals for this currency pair. The Euro currency could benefit if the European Central Bank (ECB) uses the European continent's fragmented economic landscape to its advantage by combining both quantitative easing (QE) and quantitative tightening (QT) to normalise monetary policy by minimising upset. The Euro has been recovering against the US Dollar this week. Concerns over a recession in the US have grown as the Fed continue on their hawkish path of fighting inflation. EUR/USD Price Chart UK CPI inflation data met market expectations The market is reflecting bearish signals for this currency pair. The pound sterling weakened against the Euro in the direct wake of the release of UK inflation data which mostly came in as expected, however, some parts of the report came in softer than was expected and could prove supportive of the British pound currency. UK CPI inflation data came in year-on-year in May at 9.1% which beat April's 9.0% and was in-line with the market expectations. EUR/GBP Price Chart USD/CAD The market is slowing mixed market signals for this currency pair. Canadian inflation data came in surprisingly strong for the month of May, which could likely drive investor expectations of a more hawkish Bank of Canada (BoC) interest rate hiking policies going forward, thus likely supporting the Canadian Dollar. USD/CAD Price Chart BoJ Continues to opt out of monetary policy tightening The market is reflecting bullish signals for this currency pair. As the Bank of Japan (BoJ) continues their monetary easing and chooses to stay away from tightening monetary policy, the Euro and other currencies seem to be gaining on the safe-haven asset. EUR/JPY Price Chart Sources: finance.yahoo.com, poundsterlinglive.com, dailyfx.com
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Concerns Of A Global Recession Continue To Weigh On Markets - Take A Look At The EUR/USD, EUR/GBP, GBP/AUD And EUR/JPY Currency Pairs

Rebecca Duthie Rebecca Duthie 24.06.2022 13:32
Summary: ECB expected to increase rates at a faster pace. CBA thinks the AUD is at risk of trading at its lowest levels against the GBP since the start of the pandemic.\\ Read next: Data Showed A Slowing Eurozone Economy (EUR/USD, EUR/CHF), UK PMI Data Came In Stronger Than Expected (EUR/GBP), NZD Was The Top Performing Currency On Thursday (GBP/NZD)  EUR/USD currency pair The market is reflecting bullish signals for this currency pair. At this point, the market expects to see a continuing hawkish Federal Reserve, pushing both interest rates and long-term rates up even further, thus, the USD is likely to remain strong for most of the remainder of 2022. The European Central Bank (ECB) is expected to raise interest rates further and at a faster pace, the ECB has already communicated hikes in both July and September, as it tries to contain the Eurozone inflation narrative. As concerns around a global recession tighten, the aggressive 75 basis point rate hike made by the Fed has caused investors to be more cautious across the board. EUR/USD Price Chart Eurozone and UK economy slowing. The market is reflecting bearish signals for this currency pair. UK retail sales declined in May as consumers felt the pain of rising prices which in turn did not allow the pound sterling a boost heading into the weekend. In addition the retail data from the UK came after the data revealved by France and Germany also missed market expectations. The markets are expecting economic slowdown in both the UK and Eurozone economies. EUR/GBP Price Chart CBA outlook on AUD According to the Commonwealth Bank of Australia (CBA), the Australian Dollar is at risk of trading at its lowest levels against the British pound since the start of the Covid-19 pandemic. The CBA sees the AUD as being amongst the most vulnerable currencies to the recent souring of the global economic outlook. GBP/AUD Price Chart EUR/JPY The market is reflecting mixed signals for this currency pair. As the Japanese Yen (JPY) continues to weaken in the wake of a dovish Bank of Japan (BoJ), the Euro is also experiencing troubles in the wake of disappointing economic data released from France and Germany, which indicates a slowing of the Eurozone economy. EUR/JPY Price Chart Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com
UK Public Sector Borrowing Sees Decline in July: Market Insights - August 22, 2023

Retail Sales Fail to Dampen Wall Street as Bank Earnings Inspire Investor Confidence; Dow Faces Major Obstacle at 35,000

Craig Erlam Craig Erlam 19.07.2023 08:20
Retail sales numbers don’t hold Wall Street back Bank earnings give investors hope 35,000 a big obstacle to overcome for the Dow   Stock markets have turned positive on Tuesday after falling earlier, with US retail sales data initially weighing slightly. The numbers were much weaker than expected for June but then the May figures were revised up so it wasn’t all bad. I’m not convinced today’s data really changes things as far as the consumer or economy is concerned, all things considered, nor has it really changed anything on interest rate expectations, with markets almost fully pricing in a hike next week and probably no more after that. Wall Street was also buoyed by Morgan Stanley and Bank of America results which gave investors some further cause for optimism early in earnings season. Of course, this is just one hurdle cleared but investors will be hoping it’s a sign of things to come.   35,000 the next big obstacle for the Dow US30 Daily   The US30 has rallied almost 1% today but it quickly ran into resistance around 35,000. This level has previously been a key area of support and resistance, most recently in December, and it’s proving to be the case again. A break above here would be significant as the US30 hasn’t traded above here since April last year when it peaked around 35,500. This would be the next notable resistance level if it can overcome 35,000.  
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Mixed Retail Sales and Strong Bank Results Shape Market Sentiment

Ed Moya Ed Moya 19.07.2023 08:29
Both the advance and core (ex-auto) retail sales monthly reading post third straight gain Fed rate hike odds stand at 93.6% for July 26th meeting ECB odds for a July rate hike stand at 93.2%. while September falls to 60.1% US stocks are lower after a retail sales report confirmed the US economy is still healthy and ready for another quarter-point rate rise by the Fed.     It was a busy morning as Morgan Stanley posted mixed results, while Bank of America impressed.  We are done with the majority of the big banks and the overall takeaway is that they did ok despite all the turmoil that stemmed from the regional banking crisis last quarter.  Wall Street knows this earnings season will have everyone calling this a challenging market environment, but optimism might remain that a resilient US economy should translate into decent spending despite all the headwinds.       US Data Last major data check paves the way for one more quarter-point rate rise by the Fed.  The June retail sales report was mixed, but overall painted a picture of a resilient US consumer.  Headline retail sales gain of 0.2%, was less than both the 0.5% consensus estimate and upwardly revised prior reading.  This was the third straight monthly increase, which was bolstered by online sales.  The headline was dragged down by gasoline and building material demand weakness, but clear signs are emerging that the economy is slowing down.     Industrial production tumbled in June as auto production slumped for a second month as the economy weakens.  Demands for goods are weakening and the strong auto production numbers are coming back down. Fed swaps initially were fully pricing in a quarter-point rate rise by the Fed.  If inflation continues to come down, labor market resilience should drive expectations that Americans will still consume, albeit at a slower pace.      
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FOMO and Complacency in US Technology Stocks: Risks of Medium-Term Downside Pressure Amidst Strong Gains in Banks

Kelvin Wong Kelvin Wong 24.07.2023 10:55
Prior underperforming US banks rallied last week where the SPDR Banks ETF rose by 6.76%, its best weekly gain seen in 14 months. The high growth technology concentrated Nasdaq 100, the top year-to-date performer, underperformed last week, dragged down by Tesla and Netflix ex-post earnings releases. Extreme positioning, and complacency bias in Nasdaq 100 increase the risk of a medium-term bearish reversal in technology stocks.   In the past two weeks, we have seen the latest Q2 earnings releases of the major US banks; JP Morgan, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, Morgan Stanley, and one of the high-flying technology-related “Magnificent Seven”, Tesla as well as a Netflix. All the major banks beat earnings expectations except Goldman Sachs, but its disappointing earnings had been well-telegraphed by senior management in public speeches ahead of its result release. Both Tesla and Netflix have managed to beat their bottom lines too. Interestingly, their respective share price performances ex-post earnings releases move in opposite directions as compared with the US banks. Based on last week’s performance for the week ended 21 July, all the major US banks recorded positive returns; JP Morgan (+3.46%), Bank of America (+9.86%), Wells Fargo (+5.51%), Citigroup (+2.84%), Goldman Sachs (+7.90%), Morgan Stanley (+9.59%) which in turn managed to have a positive spill-over effect to the broader US banking sector where the SPDR S&P Bank exchange-traded fund (ETF) recorded a weekly gain of +6.76% over the same period, its best return since the week of 23 May 2022. In contrast, Tesla, and Netflix posted dismal weekly returns of -7.59% and -3.26% respectively as of the end of last Friday, 21 July which in turn triggered a negative feedback loop into the high growth, and technology-related broader stock indices; Nasdaq 100 (-0.90%) and iShares Semiconductor ETF (-1.44%).   & positioning were significant contributors to Nasdaq 100 & US technology stocks’ underperformance The main catalysts that contributed to the last week’s negative returns and underperformance of Nasdaq 100 and iShares Semiconductor ETF have been FOMO (“fear of missing out”), complacency, and extreme positioning based on a relative basis. The Nasdaq 100 is the top-performing major stock index so far globally with a year-to-date gain of +41% as of 21 July versus a loss of -10.8% seen in the SPDR Banking ETF over the same period. Thus, technology-related equities and the Nasdaq 100 have attracted momentum chasers, especially for fund managers or market participants who missed the earlier run-up since March 2023 and the need to beat benchmark stock indices. In addition, technology equities recorded an eight-week cumulative inflow of around US$15 billion that surpassed their cumulative peaks inflows of 2022 according to a recent BofA Global Investment Strategy research report. Also, based on recency bias behavioral traits that extrapolate current year-to-date outperformance of Nasdaq 100 into the future, for the months ahead and even next year may have led to a higher level of complacency and extreme level of relative positioning.     US Technology stocks are at risk of further medium-term downside pressure & underperformance   Fig 1:  Relative performance of Nasdaq 100 & iShares Semiconductors over SPDR Banking, put/call ratio of Nasdaq 100 as of 21 Jul 2023 (Source: TradingView, click to enlarge chart) The chart above plots the relative performance (ratio) of Nasdaq 100 ETF (QQQ) over SPDR Banking ETF (KBE), and iShares Semiconductor ETF (SOXX) over SPDR Banking ETF (KBE). Both the ratios QQQ over KBE and SOXX over KBE have reached fresh all-time levels in June 2023 and May 2023 respectively. In addition, these two ratios have hit more than two standard deviations above their respective 20-week moving averages which suggest relatively overstretched bullish positioning in the Nasdaq 100 and semiconductor stocks. The current reading seen in the options market indicates the bullish momentum of Nasdaq 100 is likely to persist as indicated by the put-call ratio of Nasdaq 100 ETF (QQQ) which measures the number of traded put options divided by call options on the long side. A falling ratio indicates more calls are being bought versus puts which suggests market participants are not afraid of a falling market and have a bullish bias that prices may continue to rise, and if a negative event arises, it can easily reverse prices to the downside due to complacency of market participants. Vice versa for a rising put-call ratio. Since 15 May 2023, the put-call ratio of Nasdaq 100 ETF (QQQ) has continued to decline and as of 17 July, it stood at 1.19 which is a nine-week low. Therefore, it will be a pivotal week ahead for Nasdaq 100 and the “Magnificent Seven” as market participants await the earnings results and guidance of Microsoft, Alphabet, Texas Instruments (out on Tuesday, 25 July), and Meta Platforms (out on Wednesday, 26 July).

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