earnings

Netflix beats

By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank  

Netflix jumped 8% in the afterhours trading as its revenue and new subscriptions topped estimates. More than 13 mio people decided that Netflix was worth paying for, and the number of total paid subscribers rose past 260 mio. The password sharing ban has been a boon for the company. The only thing they regret is not having thought about it before.  

Strong Netflix results will likely give a positive spin to the major US indices which were slow to move yesterday after the Richmond manufacturing index came in much lower than expected. 

In the sovereign space, a mixed 2-year bond auction in the US hinted at declining optimism from the Federal Reserve's (Fed) dovish camp, but a jump from foreign buyers pulled the US 2-year yield lower. The 10-year yield remains steady above the 4.10% and will hopefully cross back above the 2-year yield after having stayed inverted for more than a year-and-a-half as the US soft-la

Fed Expectations Amid Mixed Data: Wishful Thinking or Practical Pause?

Markets Going To Shock! What To Expect? Nasdaq, Hang Seng, ASX200, (Australian Dollar To US Dollar) AUDUSD, IBM And Netflix Earnings

Saxo Bank Saxo Bank 19.04.2022 09:14
Equities 2022-04-19 06:00 6 minutes to read Summary:  Global growth to slow says the World Bank, Earnings estimates are weaker and markets brace for more rate hikes. So, Traders turn to commodities again. Oil continues its climb from last week, as global mobility picks up while supply remains cut off from Libya. Broad Asian markets are mixed, yet stocks shine in power generation and Ag. While down under in Australia, their share market inches toward its record all time high, beefed up iron ore, oil and fertilizer stocks. What’s happening in equites that you need to know? The major US indices brace for weakness:   The Nasdaq 100 (USNAS100.I), S&P 500 (US500.I) are on the back foot, trading under their 50-day moving averages. Q1 earnings expectations are the weakest since March 2020, plus results so far are showing profit erosion and rising input costs. Traders are digesting World Bank estimates of slower growth for the year, and bracing for more rate hike hints Thursday. Meanwhile, oil giants remain favored, Occidental (OXY) shares trade up 112% this year, Halliburton (HAL) trades up 82% YTD, Marathon Oil (MRO) up 63% YTD, with oil companies likely to see the strongest earnings growth this year. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   Asian markets are mixed: The MSCI Asia Pacific, ex Japan Index (FMASM2) is lower. Singapore’s STI Index (ES3) up 0.7% led by power generation firm Sembcorp (S51), travel stocks such as Genting Singapore (G13) and Singapore Airlines (C6L) as well as agriculture stock Wilmar (F34) and banks UOB (U11) and DBS (D05). Japan’s Nikkei (NI225.I) was trading flat, supported mainly by gains in base metals but dragged by Fast Retailing (9983). MSCI Asia Pacific ex-Japan was lower after US stocks closed in the red overnight and gains in oil prices continued. HK equities retreat.  Hang Seng Index (HSI.I) retreated by 2.8% after coming back from the 4-day long holiday weekend.  Investors found the 25 basis point reserve requirement ratio cut by the People’s Bank of China last Friday disappointing as they had been expecting a more typical 50 bp reduction and a 10 bp cut in the policy Medium-term Lending Facility (MLF) rate as well.  Bilibili (09626) lost 11% on rumor that the company was laying off staff in its live streaming department.  E-commerce names declined on report that the Shanghai Administration for Market Regulation had asked e-commerce companies to a meeting and called on the latter to improve on practices on pricing and delivery of necessities to consumers during the lockdown.  Alibaba (09988) and Meituan (03690) fell 4% to 6%. China Merchant Bank (03968) fell 11% following the abrupt departure of the Chinese bank’s president. CSI300 (000300.I) declined modestly.  Coal miners and fertilizer producers gained. The Australian share market is nearing a record all time high. The (ASX200)is up 0.5% on Tuesday, up for the third day and is now just 0.3% away from hitting its record high. The RBA meeting minutes showed that quicker inflation and a pick up in wages growth will bring forward the timing of the RBA’s first rate hike, however that’s not spooking the ASX, as most sectors trade higher. Gold stocks are leading the market today, like Ramelius (RMU) up 5%, Perseus (PRU) up 4% as investors back the safe haven asset as it traditionally rallies when interest rates rise. While shares in fertizlier and explosive company Incitec Pivot (IPL) are up 4%, to their highest level since 2018 after announcing production will kick off again at its ammonia plant. Elsewhere, oil and coal shares are pushing up while, shares in Australia’s biggest iron ore companies, BHP, FMG and RIO trade higher as iron ore sets 2.5 months highs. Crude oil (OILUKJUN22 & OILUSMAY22) continues to move up, extending its uptrend from last week, WTI oil back at $108, Brent up $113.39 as Libya oilfield outage cut off half a million barrels a day, adding to lack of supply from the war in Ukraine. PLUS, global mobility is rising. For example, Moody's (rating agency) expects travel to be back to normality in 12-18 months. More imminently, China Eastern Airlines resumed flying Boeing 737-800 jets from last weekend following the deadly crash Grain prices surge again. Wheat prices (futures) up 3.6% to $11.28 a bushel, forming another uptrend on lack of supply fears, as colder weather (snow) is tipped to slow planting in Canada. Plus, Wheat planting in US is growing slower than last year. USDA’s springs wheat seedings crop progress report shows 8% of the expected area was planted, compared to 18% last year. Wheat is likely to head higher due to warmer summers, colder winters, meaning soil temps in Canada and US are not ideal, so slimmer supply is ahead, which is supporting wheat prices. Meanwhile Corn prices near a record high. And International Rice Research institute forecasts rice yields may drop 10% in the next season - that is 36mn tons. This will continue to get worse if the war continues.   For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy? Iron ore (SCOA) trading above $155 for first time in  2.5 months.  Iron ore likely to continue uptrend and also potentially spike if China cuts interest rate again. This is supporting stocks like BHP, RIO FMG. USDJPY pays no heed to Japanese authorities’ verbal intervention, and rightly so given the monetary policy divergence between the Fed and the BOJ widens the yield differential. USDJPY surged to fresh 20-year highs of 127.55 this morning and the next level to watch is 128 but many are calling for 130 in the days to come. After some warnings from BoJ’s Kuroda yesterday, Japanese Finance Minister Shunichi Suzuki expressed concerns about the sharp drop in the yen today. Bitcoin dropped to lowest level in a months, as risk appetite is dropping like a stone.  Bitcoin fell below key level of support, so watch positions and also in stocks like Block (SQ, SQ2), that make 75% of revenue from BTC What you need to consider World Bank downgrades global growth estimates. The World Bank cut its 2022 outlook to 3.2% from 4.1%, dragged down by Europe and Central Asia amid the Russian invasion of Ukraine. World Bank Chief Economist Carmen Reinhart said there is “exceptional uncertainty” in global markets and further downgrades cannot be ruled out. The Australian dollar is rising back up (AUDUSD) as iron ore and oil prices lift.  The AUDUSD not only pushed higher ahead of RBA Meeting Minutes, but also as the Iron Ore price hit its highest level in 2.5 months, while oil rose to its highest in 4 weeks (these are two of Australia’s largest exports). And finally, the AUD is also being supported higher as Australian tourism is picking up, with the First cruise ship docking in Sydney Harbour since covid ban two years ago. Brace for more hawkish Fed talk this week.  We had James Bullard on the wires yesterday, and he planted the seeds of a 75-basis points rate hike given that the Fed needs to get to neutral rate very soon. Base case for the May meeting is still a 50-basis points rate hike, and a final word on that should be watched from Fed Chair Powell on Thursday as he speaks at the IMF conference. Still, brace for more volatility in yields and further gains in the US dollar as Fed continues to raise the bar of its hawkishness. Trading ideas to consider Asian agriculture stocks are on watch. For reasons mentioned above, it could be worth watching grain stocks like Australia's GrainCorp (GNC), Elders (ELD), or ag chemical company Nufarm (NUF), or Incitec Pivot (IPL), or food processing company Wilmar (WIL) listed in Singapore, or Japan's Yamazaki Baking (2212) may be of interest. Singapore reopening theme in focus into the summer.  Singapore Airlines (C6L) has seen a big jump in passenger volumes this year. Air passenger traffic has reached 31% of pre-covid levels last week up from 18% a month ago. That bodes very well with our reopening theme, and stocks to watch will be Singapore Airlines, SATS (S58) and Genting Singapore (G13). Singapore Airlines and SATS are adapting big technology changes to avoid getting trapped in labour shortages, but also still hiring in a big way in anticipation of a rebound in summer travel. US Earnings to watch. Bank of America (BAC) surged on better-than-expected Q1 results but BNY Mellon (BK) slumped. Focus now on mid-tier financial services earnings like Fifth-third (FITB) and Citizens Financial (CFG). Also on watch will be J&J (JNJ), Netflix (NFLX), Lockheed Martin (LMT), IBM (IBM), Halliburton (HAL) and others. Key issues to consider will be inflation and Fed’s aggressive tightening, but also how supply chains and consumer demand recovery is shaping up. Key APAC economic releases this week: Tue, Apr 19: Japan industrial production Wed, Apr 20: Japan March trade, China 1-year and 5-year loan prime rates Thu, Apr 21: HK March unemployment rate Fri, Apr 22: HK March CPI, RBI meeting minutes   For a global look at markets – tune into our Podcast  
Chart of the Week - Gold Miners vs Energy Producers - 20.04.2022

You Should Follow These Events And Assets! Saxo Bank's QuickTake: NAS100, S&P 500, Stoxx 50, EURUSD, USDJPY, XAUUSD, Crude Oil, Russia-Ukraine War - And More

Saxo Bank Saxo Bank 19.04.2022 10:16
Macro 2022-04-19 08:34 6 minutes to read Summary:  Markets are trying to maintain an even keel as bond yields and oil prices continue to press higher. Europe returns from its long holiday weekend today as the war in Ukraine is heating up in the east and the hawkish Fed voter Bullard says he would not rule out a 75-basis-point hike at the May 4 FOMC meeting. Gold failed a bid to take the 2,000 dollar per ounce threshold yesterday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  - US equities have been weak over the past week with negative reactions to earnings from US financials with JPMorgan Chase’s unexpected increase in credit provisions indicating credit conditions will worsen. This week major earnings releases in the US will dominate the reaction function and set the direction for the S&P 500 futures which are trading around the 4,400 level this morning with yesterday’s low at 4,355 being the key level to watch on the downside. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I)  Hang Seng Index retreated more than 2% after investors found the 25 bp reserve requirement ratio cut by the People’s Bank of China last Friday disappointing as they had been expecting a more typical 50 bp reduction and a 10 bp cut in the policy Medium-term Lending Facility (MLF) rate as well.  E-commerce names declined on report that the Chinse authority had asked e-commerce companies to a meeting and called on the latter to improve on practices on pricing and delivery of necessities to consumers during lockdowns. Alibaba and Meituan fell 3% to 5%. China Merchant Bank fell 11% following the abrupt departure of the Chinese bank’s president. CSI300 saw a modest decline with coal miners, agricultural chemicals and fertilizer producers, and energy sector seeing demand. Stoxx 50 (EU50.I)  – Stoxx 50 futures are stuck in the mud ahead of a critical week with US Q1 earnings releases and Russia’s new offensive in Donbass marking the beginning of the next and more critical phase of the war in Ukraine. Stoxx 50 futures are trading around the 3,750 level this morning and is boxed into a tight trading range from 3,710 to 3,800. EURUSD  – the euro traded and closed below the prior cycle low of 1.0800 after an initial sell-off through that level in the wake of last week’s ECB meeting failed to stick. Yield spreads at the short end of the curve, relative to the US, have generally trended sideways for nearly a month, although longer yields have risen more aggressively in the US since late March. USD liquidity concerns as risk sentiment is poor and the market fears more aggressive Fed quantitative tightening may be the key driver here. Watching the next chart level at 1.0636, the low from early 2020. USDJPY and JPY crosses.  The JPY continues to run away to the downside, with USDJPY hitting 128.00 for the first time since 2002, as long US treasury yields notched a new cycle peak yesterday and will soon threaten the 3.00% level if they continue to rise, underlining the policy divergence with the Bank of Japan, that continues to stick with its yield-curve-control policy that caps 10-year JGB yields at 0.25%. Both the Bank of Japan and the Japanese Ministry of Finance have stepped up their verbal interventions against JPY volatility as recently as overnight, but until a policy shift is spotted, or real intervention is mobilized, the market is content to continue driving the JPY lower. The next major chart point is the early 2002 high near at 135.00. AUDJPY has also surged to fresh record highs of 94.50+ as the AUD was slightly firmer following the hawkish tilt in RBA minutes. Suzuki is heading for a bilateral meeting with the US and comments would be on watch. For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy? Gold (XAUUSD) attempted but failed to reach $2000, more a psychological than technical resistance level during Monday’s low liquidity session. Leveraged funds (futures) and asset managers (ETFs) both bought gold in the week to April 12, a sign the technical and fundamental outlook have – for now - aligned in support of the yellow metal. The World Bank cut its forecast for global economic growth while Fed’s Bullard talked up the prospect for a 75 basis point rate hikes given the need to raise rates to around 3.5% this year. While higher interest rates may weigh, worries about inflation, growth, and increased market volatility together with the geo-political uncertainties have maintain the upper hand. Support at $1965. Crude oil (OILUKJUN22 & OILUSMAY22) has extended its pre-Easter rally after Libya shuts its largest oil field amid protest, thereby draining an already undersupplied market further. Chinese fuel demand, currently estimated to be down 2 million barrels per day is likely to recover swiftly once lockdowns are lifted after China vowed to repair the economic damage. More than 500,000 barrels per day is currently offline in Libya and together with the EU attempts to phase out Russian oil imports, the market is expected to remain tight despite the announced release from strategic reserves held by the US and IEA members. Brent finding some resistance around $113.75 with a break potentially signaling a fresh push towards $120 per barrel. Copper (COPPERUSJUL22) reached its second highest ever close on Monday, as global mining disruptions continued to weigh on a market where exchange-monitored inventories are already at alarmingly low levels. Around 20% of Peru’s exports are out of action following local community protests. In addition, a Chinese government pledge to support the economy once lockdowns are lifted, and the increased urgency to reduced dependency on fossil fuels via electrification are likely to underpin the price further. Resistance at $4.86, a local high, and support at $4.65, the 50-day moving average. US Treasuries (IEF, TLT) and European Sovereign Debt. Despite the fresh hawkish talk from St. Louis Fed president Bullard, who is a voter at FOMC meetings this year, the short end of the US yield curve remains relatively steady, while long yields have continued to test higher as the US yield curve steepens. The next major obvious test for the long end is the 2018 high for the 10-year Treasury benchmark at 3.25% What is going on? World Bank downgrades global growth estimates. The World Bank cut its 2022 outlook to 3.2% from 4.1%, dragged down by Europe and Central Asia amid the Russian invasion of Ukraine. World Bank Chief Economist Carmen Reinhart said there is “exceptional uncertainty” in global markets and further downgrades cannot be ruled out. Get ready for more hawkish Fed talk this week. We had James Bullard on the wires yesterday, and he planted the seeds of a 75-basis points rate hike given that the Fed needs to get to neutral rate very soon. The base case for the May meeting is still a 50-basis points rate hike, and a final word on that should be watched from Fed Chair Powell on Thursday as he speaks at the IMF conference. Still, brace for more volatility in yields and further gains in the US dollar as Fed continues to raise the bar of its hawkishness. The Bloomberg Grains Subindex (AIGG:xlon) has returned to challenge to the March record high with the near month corn contract (CORNJUL22) exceeding $8 per bushel for the first time in almost a decade while wheat (WHEATJUL22) has also resumed its recent strong rally. Catalysts being the war in Ukraine, potentially reducing this year's corn crop by 40%, as well as drought and heat damage to crops in the US Midwest. In addition, the recent strong surge in US natural gas prices has further lifted the cost of fertilizer, thereby potentially seeing US farmers switch more acreage to less nutrient intensive soybeans from wheat and corn. What are we watching next? JPY intervention?  The verbal intervention from the Bank of Japan and the Japanese Ministry of Finance have failed to impress the market. At some point the Japan’s MoF may feel it is necessary to mobilize an actual intervention in the market, something it has a long history of doing, though in the past, ironically in the direction of avoiding further JPY strength, not weakness. These interventions may not achieve more than temporary success if the underlying policy and market dynamic don’t shift (I.e., the Bank of Japan sticking to its current policy while inflationary pressures and yields elsewhere continue higher). But the risk of tremendous two-way, intraday volatility should be appreciated. War in Ukraine developments as Ukrainian president Zelenskiy said that Russia is initiating an effort to take the Donbas region in Easter Ukraine. An isolated force of Ukrainian forces in Mariupol continues to hold out against Russian efforts to take the city. Earnings Watch.  The Q1 earnings season started last week with EPS beating in all cases but Schwab indicated that earnings momentum is intact among US financials. JPMorgan Chase’s earnings release showed higher than expected credit provisions which may be early signs that the credit cycle is moving into its next phase. This week the key focus is on Johnson & Johnson (today), Netflix (today), Lockheed Martin (today), Halliburton (today), ASML (Wed), Sandvik (Wed), Tesla (Wed), Procter & Gamble (Wed), CATL (Thu), Nidec (Thu), ABB (Thu), NextEra Energy (Thu), Snap (Thu). Tuesday: Shenzhen Mindray Bio-Medical, Johnson & Johnson, Netflix, Lockheed Martin, IBM, Halliburton,  Wednesday: China Mobile, China Telecom, ASML, Heineken, ASM International, Sandvik, Tesla, Procter & Gamble, Abbott Laboratories, Anthem, CSX, Lam Research, Kinder Morgan, Baker Hughes Thursday: Contemporary Amperex Technology (CATL), Sartorius Stedim Biotech, Nidec, Investor AB, ABB, Danaher, NextEra Energy, Philip Morris, Union Pacific, AT&T, Blackstone, Intuitive Surgical, Freeport-McMoRan, Snap, Dow, Nucor Economic calendar highlights for today (times GMT) 0800 – Switzerland SNB Weekly Sight Deposits 1215 – Canada Mar. Housing Starts 1230 – US Mar. Housing Starts and Building Permits 1605 – US Fed’s Evans (non-Voter) to speak 1630 – Switzerland SNB’s Jordan to speak 2350 – Japan Mar. Trade Balance 0115 – China Rate Decision Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:    
The Swing Overview - Week 16 2022

The Swing Overview - Week 16 2022

Purple Trading Purple Trading 22.04.2022 15:00
The Swing Overview - Week 16 Jerome Powell confirmed that the Fed will be aggressive in fighting the inflation and confirmed tighter interest rate hikes starting in May. Equity indices fell strongly after this news. Inflation in the euro area reached a record high of 7.4% in March. Despite this news, the euro continued to weaken. The sell-off also continued in the Japanese yen, which is the weakest against the US dollar in last 20 years.  The USD index strengthens along with US bond yields Fed chief Jerome Powell said on Thursday that the Fed could raise interest rates by 0.50% in May. The Fed could continue its aggressive pace of rate hikes in the coming months of this year. US 10-year bond yields have responded to this news by strengthening further and have already reached 2.94%. The US dollar has also benefited from this development and has already surpassed the value 100 and continues to move in an uptrend. Figure 1: US 10-year bond yields and USD index on the daily chart Earnings season is underway in equities Rising interest rates continue to weigh on equity indices, which gave back gains from the first half of the last week and weakened significantly on Thursday following the Fed’s information on the aggressive pace of interest rate hikes.   In addition, the earnings season, which is in full swing, is weighing on index movements. For example, Netflix and Tesla reported results last week.   While Netflix unpleasantly surprised by reducing the number of subscribers by 200,000 in 1Q 2022 and the company's shares fell by 35% in the wake of the news, Tesla, on the other hand, exceeded analysts' expectations and the stock gained more than 10% after the results were announced. Tesla has thus shown that it has been able to cope with the supply chain problems and higher subcontracting prices that are plaguing the entire automotive sector much better than its competitors.   The decline in Netflix subscribers can be explained by people starting to save more in an environment of rising prices. Figure 2: The SP 500 on H4 and D1 chart The SP 500 index continues to undergo a downward correction, which is shown on the H4 chart. The price has reached the resistance level at 4,514-4,520. The price continues to move below the SMA 100 moving average (blue line) on the daily chart which indicates bearish sentiment.  The nearest resistance according to the H4 chart is at 4,514 - 4,520. The next resistance is around 4,583 - 4,600. The support is at 4,360 - 4,365.   The German DAX index The DAX is also undergoing a correction and the last candlestick on the daily chart is a bearish pin bar which suggests that the index could fall further. Figure 3: The German DAX index on H4 and daily chart This index is also below the SMA 100 on the daily chart, confirming the bearish sentiment. The price has reached a support according to the H4 chart, which is at 14,340 - 14,370. However, this is very likely to be overcome quickly. The next support is 13 910 - 14 000. The nearest resistance is 14 592 - 14 632.   The DAX is affected by the French presidential election that is going to happen on Sunday April 24, 2022. According to the latest polls, Macron is leading over Le Pen and if the election turns out like this, it should not have a significant impact on the markets. However, if Marine Le Pen wins in a surprise victory, it can be very negative news for the French economy and would weigh on the DAX index as well.   The euro remains in a downtrend The Fed's hawkish policy and the ECB's dovish rhetoric at its meeting on Thursday April 14, 2022, which showed that the ECB is not planning to raise rates in the short term, put further pressure on the European currency. The French presidential election and, of course, the ongoing war in Ukraine are also causing uncertainty.  Figure 4: The EURUSD on the H4 and daily charts. The inflation data was reported last week, which came in at 7.4% on year-on-year basis. The previous month inflation was 5.9%. This rise in inflation caused the euro to strengthen briefly to the resistance level at 1.0930 - 1.0950. However, there was then a rapid decline from this level following the Fed's reports of a quick tightening in the economy. A support is at 1.0760 - 1.0780.   The sell-off in the Japanese yen is not over The Japanese yen is also under pressure. The US dollar has already reached 20-year highs against the Japanese yen (USD/JPY) and it looks like the yen's weakening against the US dollar could continue. This is because the Bank of Japan has the most accommodative monetary policy of any major central bank and continues to support the economy while the Fed will aggressively tighten the economy. Thus, this fundamental suggests that a reversal in the USD/JPY pair should not happen anytime soon. Figure 5: The USDJPY on the monthly chart In terms of technical analysis, the USD/JPY price broke through the strong resistance band around the price of 126.00 seen on the monthly chart. The currency pair thus has room to grow further up to the resistance, which is in the area near 135 yens per dollar.  
(MSFT) Microsoft and (GOOGL) Alphabet's (Google) Earnings Announcements Due Later Today

(MSFT) Microsoft and (GOOGL) Alphabet's (Google) Earnings Announcements Due Later Today

Rebecca Duthie Rebecca Duthie 26.04.2022 12:22
Summary: Tech stocks Google and Microsoft expected to make their earnings announcements today. China and the lockdowns effect on the overall economy. Will Microsoft be able to weather the current economic storm? The markets took a hit with the prospects of further lockdowns in China and the possible ripple effects that can come from a slowing of China’s economy. The price of Microsoft stocks are up today in anticipation of the company’s earnings announcement due after the market closes today. The markets took a hit with the prospects of further lockdowns in China and the possible ripple effects that can come from a slowing of China’s economy. Read next: A Reward For A Transaction!? What Is Kishu Inu Coin? ($KISHU) Let's Take A Look At This New Altcoin | FXMAG.COM With the current market already taking hits from the current economic conditions regarding inflation and general uncertainty, the added prospect of a weakening Chinese economy is causing the stock market to be volatile as investor sentiment changes. Microsoft Equity Share Price Read next: (KO) Coca-Cola Earnings Posted Exceeding Expectations, Elon Musk’s Target on Twitter (TWTR) Coming To Life!?  Investors going long on Google in anticipation for this evening's earnings announcements. Investors are waiting with anticipation in light of the earnings announcement due from the CEO of Google later this afternoon. There is a bullish market sentiment on this stock as investors hope that Google will meet market expectations, this market sentiment is driving the price of Google stocks up by more than 3%. Over the past week the price has both risen and fallen for this stock due to the volatility of the current financial markets and again the current situation in China. Investors are interested in how well companies are weathering the current economic storm. Google Equity Share Price Sources: Finance.yahoo.com, barrons.com.
The Swing Overview – Week 17 2022

The Swing Overview – Week 17 2022

Purple Trading Purple Trading 03.05.2022 11:04
The Swing Overview – Week 17 Major stock indices continued in their correction and tested strong support levels. In contrast, the US dollar strengthened strongly and is at its highest level since January 2017. The strengthening of the dollar had a negative impact on the value of the euro and commodities such as gold, which fell below the $1,900 per ounce. The Bank of Japan kept interest rates low and the yen broke the magic level 130 per dollar. The USD index strengthened again but the US GDP declined The US consumer confidence in the month of April came in at 107.3, a slight decline from the previous month when consumer confidence was 107.6.   The US GDP data was surprising. The US economy decreased by 1.4% in 1Q 2022 (in the previous quarter the economy grew by 6.4%). This sharp decline surprised even analysts who expected the economy to grow by 1.1%. This result is influenced by the Omicron, which caused the economy to shut down for a longer period than expected earlier this year.    The Fed meeting scheduled for the next week on May 4 will be hot. In fact, even the most dovish Fed officials are already leaning towards a 0.5% rate hike. At the end of the year, we can expect a rate around 2.5%.   The US 10-year bond yields continue to strengthen on the back of these expectations. The US dollar is also strengthening and is already at its highest level since January 2017, surpassing 103 level.  Figure 1: US 10-year bond yields and the USD index on the daily chart   Earnings season is underway in equities Earnings season is in full swing. Amazon's results were disappointing. While revenue was up 7% reaching $116.4 billion in the first quarter (revenue was $108.5 billion in the same period last year), the company posted an total loss of $8.1 billion, which translated to a loss of $7.56 per share. This loss, however, is not due to operating activities, but it is the result of the revaluation of the equity investment in Rivian Automotive.   Facebook, on the other hand, surprised in a positive way posting unexpectedly strong user growth, a sign that its Instagram app is capable of competing with Tik Tok. However, the revenue growth of 6.6% was the lowest in the company's history.    Apple was also a positive surprise, reporting earnings per share of $1.52 (analysts' forecast was $1.43) and revenue growth of $97.3 billion, up 8.6% from the same period last year. However, the company warned that the closed operations in Russia, the lockdown in China due to the coronavirus and supply disruptions will negatively impact earnings in the next quarter.   Figure 2: The SP 500 on H4 and D1 chart In terms of technical analysis, the US SP 500 index is in a downtrend and has reached a major support level on the daily chart last week, which is at 4,150. It has bounced upwards from this support to the resistance according to the 4 H chart which is 4,308 - 4,313. The next resistance according to the H4 chart is 4,360 - 4,365.  The strong resistance is at 4,500.   German DAX index German businessmen are optimistic about the development of the German economy in the next 6 months, as indicated by the Ifo Business Climate Index, which reached 91.8 for April (the expectation was 89.1). However, this did not have a significant effect on the movement of the index and it continued in its downward correction. Figure 3: German DAX index on H4 and daily chart The index is below the SMA 100 on both the daily chart and the H4 chart, confirming the bearish sentiment. The nearest support according to the H4 is 13,600 - 13,650. The resistance is 14,180 - 14,200. The next resistance is 14,592 - 14,632.   The euro has fallen below 1.05 The euro lost significantly last week. While the French election brought relief to the markets as Emmanuel Macron defended the presidency, geopolitical tensions in Ukraine continue to weigh heavily on the European currency. The strong dollar is also having an impact on the EUR/USD pair, pushing the pair down. The price has fallen below 1.05, the lowest level since January 2017.    Figure 4: EURUSD on H4 and daily chart The euro broke through the important support at 1.0650 - 1.071, which has now become the new resistance. The new support was formed in January 2017 and is around the level 1.0350 - 1.040.   Japan's central bank continues to support the fragile economy The Bank of Japan on Thursday reinforced its commitment to keep interest rates at very low levels by pledging to buy unlimited amounts of 10-year government bonds daily, sparking a fresh sell-off in the yen and reviving government bonds. With this commitment, the BOJ is trying to support a fragile economy, even as a surge in commodity prices is pushing the inflation up.   The decision puts Japan in the opposite position to other major economies, which are moving towards tighter monetary policy to combat soaring prices. Figure 5: The USD/JPY on the monthly and daily chart In fresh quarterly forecasts, the central bank has projected core consumer inflation to reach 1.9% in the current fiscal year and then ease to 1.1% in fiscal years 2023 and 2024, an indication that it views the current cost-push price increases as transitory.   In the wake of this decision, the Japanese yen has continued to weaken and has already surpassed the magical level 130 per dollar.   Strong dollar beats also gold Anticipation of aggressive Fed action against inflation, which is supporting the US dollar, is having a negative impact on gold. The rising US government bond yields are also a problem for the yellow metal. This has put gold under pressure, which peaked on Thursday when the price reached USD 1,872 per ounce of gold. But then the gold started to strengthen. Indeed, the decline in the US GDP may have been something of a warning to the Fed and prevent them from tightening the economy too quickly, which helped gold, in the short term, bounce off a strong support. Figure 6: The gold on H4 and daily chart Strong support for the gold is at $1,869 - $1,878 per ounce. There is a confluence of horizontal resistance and the SMA 100 moving average on the daily chart. The nearest resistance according to the H4 chart is 1 907 - 1 910 USD per ounce. The strong resistance according to the daily chart is then 1 977 - 2 000 USD per ounce of gold. Moving averages on the H4 chart can also be used as a resistance. The orange line is the EMA 50 and the blue line is the SMA 100.  
CFD News: Eyes on the GER30 as buyers look to be forming a continuation.

CFD News: Eyes on the GER30 as buyers look to be forming a continuation.

8 eightcap 8 eightcap 02.06.2022 10:18
Today we’re watching the GER30 as price looks to be setting a new continuation idea. We need to see a strong close today, but for now, in the European session, signs are looking ok. This idea and pattern is a very close copy of what we discussed ed in the US30 article but just from a different take. The GER30 has set a fast trend of the new primary trend. This trend has also broken the downtrend, and today has started to form new support from an old area of resistance which could confirm as a new demand area. Last week we saw the first break of that resistance area, and today we could be seeing it become support. If we see a higher close today and a follow-up rally tomorrow, that could set us up with a date at last week’s high that also lines up with resistance. A break above that area, and yes, we could have a new up leg on our hands. A failure to beat that resistance level or a fade on today’s rally with further selling tomorrow that takes us back below the demand area is a worry and could suggest buyer strength might not be as strong as we are thinking now. Another possible curve ball could be from tomorrow’s NFP data. Payrolls are expected to come in lower and average earnings higher. A miss could send stocks lower, and a beat should have a positive impact. The NFP will be released at 8:30 EST tomorrow. GER30 D1 Chart The post CFD News: Eyes on the GER30 as buyers look to be forming a continuation. appeared first on Eightcap.
Why do we voluntarily disclose our clients' loss ratios?

Why do we voluntarily disclose our clients' loss ratios?

Purple Trading Purple Trading 03.06.2022 09:12
Why do we voluntarily disclose our clients' loss ratios? Why rather click on an ad from a brokerage firm that states that 70% of their clients' accounts are loss-making than an ad from a broker that does not disclose this statistic at all? Come with us to delve into the ins and outs of broker licensing and learn what protections you are legally entitled to as a client. Broker's licence The operation of a brokerage company involves many minor acts anchored in legislation. From the operation of the broker as a firm with employees; arranging the opening of client accounts to handling client deposits and managing the online platform through which clients trade. For all of this, a broker needs a license. While this can be issued by almost any state authority, licences of some states are more desirable than that of others. And that is due to variety of reasons. Licenses issued in so-called offshore states allow brokers to provide their clients with very attractive trading conditions. For example, the financial leverage that allows a client to multiply his or her trading position and with it also potential earnings (as well as losses) can often go as high as 1:1000 for offshore licenses. However, when it comes to client protection, offshore licenses fall somewhat short. Client protection takes many forms and one of them is the wording of the mentioned disclaimer. Thus, if you see a disclaimer below the image of an advertisement that does not state the percentage of loss but only somewhat vaguely warns of the potential risk, it is very likely that the broker to whom the advertisement belongs has an offshore license. Image: Purple Trading banner ad (see disclaimer below the button) What is a disclaimer The short phrase "XY% of client accounts lose money" and its other small permutations, which you can see for example under our online advertisements, are part of the so-called disclaimer. The disclaimer takes many forms, from a single sentence under a banner ad on Facebook to a multi-paragraph colossus in the footer of the broker's website. The purpose of the disclaimer is simple - to highlight, to those interested in trading on financial markets, the potential risks of this activity and to disclaim broker’s responsibility for their client’s eventual failure. However, the overall message of the disclaimer might be written differently. Because sometimes we see loss percentages under the advertisement of Broker A, while Broker B's disclaimer merely tells us that trading is risky. No percentage, nothing more. Image: Sample of a shorter disclaimer on the broker's page Offshore vs EU license The European Union's legal environment is characterized by a much stricter regulatory approach. This applies to the control of pharmaceuticals, and foodstuffs, but also, for example, to the control of brokerage companies. This sector is dealt with by ESMA (European Securities and Markets Authority), to which the regulators of all countries within the EU have to answer (including the regulator of Purple Trading, the Cypriot CySEC). It is ESMA that takes it upon itself to protect consumers (in this case, investors and retail traders in the financial markets). And it does so in all sorts of ways. The aforementioned client account loss ratios on brokers' marketing materials are one of them.   Other ESMA protections include:   Reduced financial leverage Financial leverage is the ratio of the amount of capital a trader puts into an account to the funds provided by the broker. In simple terms, it is essentially borrowed capital from the broker, which is not reflected in the balance of money in your account, but allows you to trade a greater volume of transactions than you could with your own money. More experienced traders can use leverage to increase their profits many times over. However, as well as profits, leverage also multiplies losses, so less-experienced traders should be wary of using leverage generously. That's also why ESMA capped leverage limit for retail clients at 1:30 in 2018, and higher leverage (up to 1:400) can only be provided by brokers to clients who have met a number of strict criteria to qualify as a so-called Professional Client.   Protection against negative balance A key aspect of client protection. If a client's trade that he had "leveraged" fails and the multiplied loss puts him in the red, the broker will pay the entire amount that is "in the red" from his pocket. Thus, the client can never lose more money than he has deposited in his account and consequently become a debtor. Negative balance protection is compulsory for all brokers operating in the EU. It is not compulsory for offshore brokers, which, combined with the high leverage offered there, can lead to very unfortunate situations.   Segregation of client deposits Forex and online trading, in general, has come a long way since its beginning in 2008. Especially in the early days, the online trading environment was highly unregulated and it was not uncommon for brokers to use capital from client deposits to fund their operations. More than that, there were also cases where the client’s capital was outright misused to enrich a select few. Brokers operating in the EU are obliged to secure clients’ funds in many ways. One is depositing client capital in accounts segregated from the capital brokers use to finance their operations. What if the broker fails to provide his clients with these guarantees? Brokers subject to such strict regulatory authorities as CySEC (cypriot based regulator under ESMA) must undergo regular audits. As part of these audits, the regulator monitors whether all the measures resulting from the licence granted by the regulator are being complied with. Should this not be the case, the broker is usually subject to a hefty fine and often even the suspension of its licence. This means that broker cannot really afford not to comply with the client protection principles of the EU regulatory environment. Conclusion Voluntary disclosure of client account loss rates under broker advertisements may seem odd. However, it is a positive signal that lets you know that the broker in question is highly regulated. Therefore, if you choose to trade with them, you are protected by a number of legislative regulations that the broker will not dare to violate. See which EU broker has the best disclaimer number
The Swing Overview – Week 23 2022

The Swing Overview – Week 23 2022

Purple Trading Purple Trading 17.06.2022 08:53
The Swing Overview - Week 23 Major global stock indices broke through their support levels after several days of range movement in response to the tightening economy, the ongoing war in Ukraine, slowing economic growth and high inflation. The Reserve Bank of Australia raised its interest rate by 0.50%. The ECB decided to start raising interest rates by 0.25% from July 2022. The winner of last week is the US dollar, which continues to strengthen. Macroeconomic data Data from the US labour market was highly anticipated. The job creation indicator, the so-called NFP, surprised the markets positively. Analysts expected that 325,000 new jobs had been created in May. In fact, 390 thousand jobs were created in the US. Unemployment is at 3.6%. The information on the growth of hourly wages, which is a leading indicator of inflation, was important. Average hourly earnings rose 0.3% in May, less than analysts who expected 0.4%.   Unemployment claims reached 229,000 this week. This is the highest levels since 3/3/2022. However, this is not an extreme increase. The number of claims is still in the pre-pandemic average area. Nevertheless, it can be seen that since 7/4/2022, when the number of applications reached 166 thousand, the number of applications is slowly increasing and this indicator will be closely monitored.  The ISM index of purchasing managers in the US service sector reached 55.9 in May. This is lower than the previous month's reading of 57.1. A value above 50 still points to expansion in the sector although the decline in the reading indicates  economy.   The yield on the US 10-year bond is close to its peak and is currently around 3%. The rise in yields has been followed by a rise in the US dollar. The dollar index has surpassed 103. The reason for the strengthening of the dollar is the aggressive tightening of the economy by the US Fed, which began reducing the central bank's balance sheet on June 1, 2022. In practice, this means that the Fed will let expire the government bonds it previously bought as part of QE and will not reinvest them further. The first tranche of bonds will expire on June 15, so the effect of this operation remains to be seen. Figure 1: The US 10-year bond yields and USD index on the daily chart   The SP 500 Index The SP 500 index has been moving in a narrow range for the past few days between 4,200, where resistance is and 4,080, where support has been tested several times. This support was broken and has become the new resistance as we can see on the H4 chart.   Figure 2: The SP 500 on H4 and D1 chart   The catalyst for this strong initiation move is the strong US dollar and rising bond yields. Therefore, the current resistance is in the 4,075 - 4,085 range.  The nearest support is 3,965 - 3,970 according to the H4 chart. The next support is 3,879 - 3,907.   German DAX index Macroeconomic data that affected the DAX was manufacturing orders for April, which fell 2.7% month-on-month, while analysts were expecting a 0.3% rise. Industrial production in Germany rose by 0.7% in April (expectations were for 1.0%). The war in Ukraine has a strong impact on the weaker figures. The catalyst for breaking support was the ECB's decision to raise interest rates, which the bank will start implementing from July 2022. Figure 3: German DAX index on H4 and daily chart The DAX is below the SMA 100 moving average according to the daily and H4 chart. This shows a bearish sentiment. The nearest resistance is 14,300 - 14,335. Support is at 13,870 - 13,900 according to the H4 chart.   The ECB left the interest rate unchanged  The ECB left interest rates unchanged on June 9, 2022, so the key rate is still at 0.0%. However, the bank said that it will proceed with a rate hike from July, when the rate is expected to rise by 0.25%. The next hike will then be in September, probably again by 0.25%. The bank pointed to the high inflation rate, which is expected to reach 6.8% for 2022. Inflation is expected to fall to 3.4% in 2023 and 2.1% in 2024.  Figure 4: The EUR/USD on H4 and daily chart According to the bank, a significant risk is Russia's unjustified aggression against Ukraine, which is causing problems in supply chains and pushing energy and some commodity prices up. The result is a slowdown in the growth of the European economy. The bank also announced that it will end its asset purchase program as of July 1, 2022. This is the soft end of this program, as the money that will flow from matured assets will continue to be reinvested by the bank. In practice, this means that the ECB's balance sheet will not be further inflated, but for now, unlike the Fed’s balance sheet, the bank has no plans to reduce its balance sheet. This, coupled with the more moderate rate hike plans and the existence of the above risks, has supported the dollar and the euro has begun to weaken sharply in response to the ECB announcement. The resistance is 1.0760-1.0770. Current support at 1.063-1.064 is broken and it will become new resistance if the break is confirmed. The next support according to the H4 chart is 1.0530 - 1.0550.   Australian central bank surprises with aggressive approach In Australia, the central bank raised its policy rate by 0.50%. Analysts had expected the bank to raise the rate by 0.25%. Thus, the current rate on the Australian dollar is 0.80%. However, this aggressive increase did not strengthen the Australian dollar, which surprisingly weakened. The reason for this is the strong US dollar and also the risk off sentiment that is taking place in the equity indices.  Also impacting the Aussie is the situation in China, where there is zero tolerance of COVID-19. This will impact the country's economic growth, which is very likely to fall short of the 5.5% that was originally projected.  Figure 5: The AUD/USD on H4 and daily chart According to the H4 chart, the AUD/USD currency pair has broken below the SMA 100 moving average, which is a bearish signal. The nearest resistance is 0.7140 - 0.7150. The support is in the zone 0.7030 - 0.7040. 
What role does the broker infrastructure model play in your profitability?

What role does the broker infrastructure model play in your profitability?

Purple Trading Purple Trading 27.06.2022 12:31
What role does the broker infrastructure model play in your profitability? The layout of a broker's trading infrastructure is usually not something that would capture the attention of too many traders. However, did you know that a surprisingly large number of brokers do not send their clients' trade orders to the real market, but rather create an artificial counterparty themselves are market makers? This creates motivation for order manipulation, which, on the other hand, is indeed something that traders should be interested in. What is the broker infrastructure model? The broker model refers to the way in which a broker's trading infrastructure is built to process the trading orders of its clients. While it may seem that way, when trading, an order entered by you into the platform may not always travel to the interbank market where it is then expected to be paired with an order from another trader or institution. In fact, there are models that do not send your trade orders to the interbank market. Instead, they form a counterparty to your order immediately, on their side. Market maker model (MM) Brokers of this type are usually among the larger ones on the scene. In order to act as a counterparty to all their clients' trades, they need to have a really high level of liquidity. However, this could lend them a fair amount of motivation to meddle with the trading results of their clients. If it is a proven broker without a dark past, there is probably no reason to worry. However, there are known cases where even larger brokerage firms have artificially increased slippages, set minimum stop loss intervals, or influenced their clients' transactions in other similar ways. The reason for this behavior is quite clear. In the MM model, all losing client trades go back to the broker (not to the interbank market, where they would end up in other broker operating models). Thus, brokers built on the MM model may have a vested interest in the loss-making performance of their own clients.   Figure 1: Schematic of the MM broker's operation STP model From the "straight-through processing", brokers of this type have their infrastructure set up in such a way that they can only match their clients' orders with orders from so-called liquidity providers in the interbank market. The broker in this case charges a commission on each trade in the form of a slightly higher spread and matches clients with entities in the real market. Liquidity providers (LP) The quality of an STP broker is largely shaped by the nature of the liquidity providers with which it works.   Another broker operating on a market maker model or a bank. MFT - multilateral trading facility - a type of exchange on which different participants are linked together. Prime of primes - this provider collects prices from the interbank market and combines them with other offers from financial institutions. This LP thus has the ability to provide the best prices to the broker's clients.   Figure 2: Difference between STP and MM broker model Hybrid model Combination of STP and MM models. A broker based on the hybrid model has the ability to send a certain part of client orders to the interbank market and act as a counterparty for the rest. The broker thus has the ability to "get rid" of profitable clients by sending their orders to an external entity. How to find out which model is broker built on? Recognizing a broker's model may not be easy at first as it requires at least a partial orientation on the broker's website. The safe bet, however, is to check the broker's license directly on the Regulators website. The information about the infrastructure model is listed there in black and white. Just look up whether the broker is authorised to "deal on own account". STP model brokerage will not have it there. Figure 3: An example of the types of services Purple Trading can perform under its license (source: https://www.cysec.gov.cy/en-GB/entities/investment-firms/cypriot/72454/) What role does the broker model play in your profitability? While there is no way to equate a broker's model with the profitability of its clients, there are certain things that cannot be overlooked. While an STP broker has the same rate of earnings whether your trade is successful or not (because it profits from spreads), the MM and hybrid models can already benefit from your potential failures. Let's also mention the fact that by forming a counterparty to your trades on their side, these brokers potentially have the motivation to manipulate the market to their advantage. So as a trader, you logically have to wonder whether a broker who has such tools in his hand is not abusing them to enrich himself at your expense.
What Does Inflation Rates We Got To Know Mean To Central Banks?

What Does Inflation Rates We Got To Know Mean To Central Banks?

Purple Trading Purple Trading 15.07.2022 13:36
The Swing Overview – Week 28 2022 This week's new record inflation readings sent a clear message to central bankers. Further interest rate hikes must be faster than before. The first of the big banks to take this challenge seriously was the Bank of Canada, which literally shocked the markets with an unprecedented rate hike of a full 1%. This is obviously not good for stocks, which weakened again in the past week. The euro also stumbled and has already fallen below parity with the usd. Uncertainty, on the other hand, favours the US dollar, which has reached new record highs.   Macroeconomic data The data from the US labour market, the so-called NFP, beat expectations, as the US economy created 372 thousand new jobs in June (the expectation was 268 thousand) and the unemployment rate remained at 3.6%. But on the other hand, unemployment claims continued to rise, reaching 244k last week, the 7th week in a row of increase.   But the crucial news was the inflation data for June. It exceeded expectations and reached a new record of 9.1% on year-on-year basis, the highest value since 1981. Inflation rose by 1.3% on month-on-month basis. Energy prices, which rose by 41.6%, had a major impact on inflation. Declines in commodity prices, such as oil, have not yet influenced June inflation, which may be some positive news. Core inflation excluding food and energy prices rose by 5.9%, down from 6% in May.   The value of inflation was a shock to the markets and the dollar strengthened sharply. We can see this in the dollar index, which has already surpassed 109. We will see how the Fed, which will be deciding on interest rates in less than two weeks, will react to this development. A rate hike of 0.75% is very likely and the question is whether even such an increase will be enough for the markets. Meanwhile, there has been an inversion on the yield curve on US bonds. This means that yields on 2-year bonds are higher than those on 10-year bonds. This is one of the signals of a recession. Figure 1: The US Treasury yield curve on the monthly chart and the USD index on the daily chart   The SP 500 Index Apart from macroeconomic indicators, the ongoing earnings season will also influence the performance of the indices this month. Among the major banks, JP Morgan and Morgan Stanley reported results this week. Both banks reported earnings, but they were below investor expectations. The impact of more expensive funding sources that banks need to finance their activities is probably starting to show.   We must also be interested in the data in China, which, due to the size of the Chinese economy, has an impact on the movement of global indices. 2Q GDP in China was 0.4% on year-on-year basis, a significant drop from the previous quarter (4.8%). Strict lockdowns against new COVID-19 outbreaks had an impact on economic situation in the country. Figure 2: SP 500 on H4 and D1 chart The threat of a recession is seeping into the SP 500 index with another decline, which stalled last week at the support level, which according to the H4 is in the 3,740-3,750 range. The next support is 3,640 - 3,670.  The nearest resistance is 3,930 - 3,950. German DAX index The German ZEW sentiment, which shows expectations for the next 6 months, reached - 53.8. This is the lowest reading since 2011. Inflation in Germany reached 7.6% in June. This is lower than the previous month when inflation was 7.9%. Concerns about the global recession continue to affect the DAX index, which has tested significant supports. Figure 3: German DAX index on H4 and daily chart Strong support according to the daily chart is 12,443 - 12,500, which was tested again last week. We can take the moving averages EMA 50 and SMA 100 as a resistance. The nearest horizontal resistance is 12,950 - 13,000.   The euro broke parity with the dollar The euro fell below 1.00 on the pair with the dollar for the first time in 20 years, reaching a low of 0.9950 last week. Although the euro eventually closed above parity, so from a technical perspective it is not a valid break yet, the euro's weakening points to the headwinds the eurozone is facing: high inflation, weak growth, the threat in energy commodity supplies, the war in Ukraine. Figure 4: EUR/USD on H4 and daily chart Next week the ECB will be deciding on interest rates and it is obvious that there will be some rate hike. A modest increase of 0.25% has been announced. Taking into account the issues mentioned above, the motivation for the ECB to raise rates by a more significant step will not be very strong. The euro therefore remains under pressure and it is not impossible that a fall below parity will occur again in the near future.   The nearest resistance according to the H4 chart is at 1.008 - 1.012. A support is the last low, which is at 0.9950 - 0.9960.   Bank of Canada has pulled out the anti-inflation bazooka Analysts had expected the Bank of Canada to raise rates by 0.75%. Instead, the central bank shocked markets with an unprecedented increase by a full 1%, the highest rate hike in 24 years. The central bank did so in response to inflation, which is the highest in Canada in 40 years. With this jump in rates, the bank is trying to prevent uncontrolled price increases.   The reaction of the Canadian dollar has been interesting. It strengthened significantly immediately after the announcement. However, then it began to weaken sharply. This may be because investors now expect the US Fed to resort to a similarly sharp rate hike. Figure 5: USD/CAD on H4 and daily chart Another reason may be the decline in oil prices, which the Canadian dollar is correlated with, as Canada is a major oil producer. The oil is weakening due to fears of a drop in demand that would accompany an economic recession. Figure 6: Oil on the H4 and daily charts Oil is currently in a downtrend. However, it has reached a support value, which is in the area near $94 per barrel. The support has already been broken, but on the daily chart oil closed above this value. Therefore, it is not a valid break yet.  
Stock Market: Uber, Palantir And Moderna In Top 3...

Stock Market: Uber, Palantir And Moderna In Top 3...

Purple Trading Purple Trading 15.07.2022 13:08
TOP 3 most traded CFD stocks of this week Information is one of the most valuable commodities. No one can tell you with absolute certainty where any stock is headed. But sometimes you just need to know where, at what point, and why are investors taking the most positions to try to take advantage of the volume and volatility yourselves. We bring you a summary of this week’s top 3 most traded CFD stocks at Purple Trading. What is behind their popularity and what is the outlook for the future? You can find answers to these questions in today’s article. Uber Shares of the notoricaly loss-making taxi service are under a lot of pressure this year. They have lost more than half their value since January. Uber is now selling more than 50% below the price it was when it entered the stock markets in 2019. Comparing it to its all-time high of $63.18 in early January 2021 is even more dismal. The big drop in Uber stock isn't too surprising in the context of the company's financial results from the first quarter of the year. While Uber's revenue grew 136% year-over-year to $6.9 billion, its net loss came in at $5.9 billion due to failed investments in Grab, Aurora, and DiDi. Chart 1: Uber shares on the MT4 platform on the M15 timeframe along with the 100 and 200 day moving averages Uber has become the focus of investor attention in recent days due to leaked information about lobbying high-profile politicians such as French President Emmanuel Macron. The revelations of the scandal have made Uber shares very volatile, which traders have taken advantage of.   The outlook for the coming months is not very positive for the company - high fuel prices are making Uber's services more expensive and a possible recession could significantly affect the company's revenues. Uber's business can be described as rather cyclical and in times of recession the company could suffer as a result. Nor should we underestimate the impact of the growing coronavirus, which is once again beginning to plague the entire world.   However, Uber’s relatively low valuation (it is now trading near an all-time low) and its positive cash flow outlook for 2022 is what’s playing into Uber’s hands. The company will publish its 2Q earnings in early August, and no matter the outcome, Uber shares are likely to remain popular among traders.   Palantir Uber has become the focus of investor attention in recent days due to leaked information about lobbying high-profile politicians such as French President Emmanuel Macron. The revelations of the scandal have made Uber shares very volatile, which traders have taken advantage of.   The outlook for the coming months is not very positive for the company - high fuel prices are making Uber's services more expensive and a possible recession could significantly affect the company's revenues. Uber's business can be described as rather cyclical and in times of recession the company could suffer as a result. Nor should we underestimate the impact of the growing coronavirus, which is once again beginning to plague the entire world.   However, Uber’s relatively low valuation (it is now trading near an all-time low) and its positive cash flow outlook for 2022 is what’s playing into Uber’s hands. The company will publish its 2Q earnings in early August, and no matter the outcome, Uber shares are likely to remain popular among traders. Chart 2: Palantir shares on the MT4 platform on the M15 timeframe along with the 100 and 200 day moving averages Investors still have no idea where to classify Palantir - is it an army contractor or an IT company? The stock's performance so far this year would point more towards an IT company. Military contractors like Lockheed Martin and Raytheon Technologies have had a great year so far, outperforming the S&P 500 index significantly. Palantir's CEO visited Ukraine in June in an effort to expand the company's operations. This obviously pleased investors, but potential expansion is difficult to quantify.   Moreover, the company's capitalization is still more than 10 times its annual revenue, a giant number compared to its competitors. Competitor Booz Allen Hamilton is currently selling for about 1.5 times annual sales, and the company's stock is near this year’s low. The company has a long track record of growing sales and, unlike Palantir, is profitable. Palantir's 2Q earnings are due in the first half of August. The company is expecting 25% year-on-year revenue growth. However, in the same period a year ago, the company grew revenue by 49%. Thus, any surprise in the earnings could cause high volatility. Palantir is definitely a stock to watch.    Moderna Seeing the famous vaccine producer among this week’s most traded companies in our CFD stock offering is not much of a surprise. Yet, back in mid-June, things were not looking good for Moderna shares - as this company was about 50% below the price we could see at the beginning of the year. However, the last month has been great for Moderna and its shares have soared almost by 50%. The reasons for this steep rise are clear - the coronavirus is once again on the rise globally. Since the beginning of June, the number of daily covid cases have practically doubled globally. The World Health Organisation has warned that the pandemic is far from over. This is just more water on the mill for companies such as Moderna and BioNTech. In addition, Moderna's actions were also helped by the June approval of a vaccine for American children and adolescents aged 6 months to 17 years. Chart 3: Shares of Moderna in the MT4 platform on the M15 timeframe along with the 100 and 200 day moving averages After the outbreak of the coronavirus pandemic, Moderna was the darling of investors for obvious reasons. Shares thus reached an all-time high of almost USD 500. Since last September, however, it has gone south sharply. Looking at the P/E ratio (the ratio of share price to earnings per share), Moderna looks very attractive - the ratio is now around 5, which is a great number for a pharmaceutical company. In addition, Moderna is well funded - the selling of coronavirus vaccines have given it very interesting liquidity.   The biggest concern for investors, however, is the future of the company and its earnings once the coronavirus has passed. Apart from the vaccines mentioned above, at this moment the company does not sell any other products to the public. It has several other products in the testing phase, but their final approval and sales are uncertain. Thus, Moderna's stock may continue to thrive in the coming months thanks to further covid waves. In the long term, however, the company will need more products if it is to prosper.  
West Texas Intermediate (WTI) Price Analysis: The Oil Price Has Corrected And Dropped

Crude Oil Price Probably Not Reach 100$(USD) Shortly

Swissquote Bank Swissquote Bank 18.08.2022 15:56
The equity rally in the US didn’t pick up momentum after the Federal Reserve (Fed) released its latest meeting minutes, which sounded more hawkish-than-expected, or more hawkish-than-what-was-needed-to-give-another-boost to the US stock markets. The biggest take was that the Fed will continue tightening its policy until it sees that inflation is ‘firmly on path back to 2%’. The S&P500 fell 0.72% as Nasdaq gave back 1.20%, although the jump in the US 2-year yield was relatively soft, and the Fed funds futures scaled back the expectation of a 75 bp hike in the next meeting. Crude price completed an ABCD pattern, and it is more likely than not we see the price rebound to the $100 level in the medium run. In China, Tencent announced its first ever revenue drop as government crackdown continued taking a toll on its sales, and the pound couldn’t gain even after the above 10% inflation data boosted the Bank of England (BoE) hawks and the call fall steeper rate hikes to tame inflation in the UK. Watch the full episode to find out more! 0:00 Intro 0:28 As expected, Fed minutes were more hawkish-than-expected 3:39 Crude oil has more chance to rebound than to fall 6:02 Tencent posts first-ever revenue drop 7:14 Apple extends gains, but technicals warn of correction 8:38 Pound unable to extend gains despite rising Fed hawks’ voices Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #minutes #USD #GBP #inflation #Tencent #Alibaba #earnings #crude #oil #natural #gas #coal #futures #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
JABIL (JBL) Stock Surged In The Wake Of Favourable Q4 Earnings Results

JABIL (JBL) Stock Surged In The Wake Of Favourable Q4 Earnings Results

Rebecca Duthie Rebecca Duthie 27.09.2022 22:00
Summary: JBL beast market expectations for Q4 earnings results. Sales of diversified manufacturing increased 13%. JABIL (JBL) Q4 earnings report On Tuesday, contract manufacturer Jabil (JBL) easily surpassed Wall Street's expectations for the current quarter of its fiscal year. The announcement caused JBL stock to rise. The St. Petersburg, Florida-based business reported adjusted earnings of $2.34 per share on $9.03 billion in revenue for the three months ended August 31. Jabil was predicted to report earnings of $2.15 per share on sales of $8.39 billion by analysts surveyed by FactSet. Jabil's earnings increased by 63% year over year while its sales increased by 22%. Jabil forecast adjusted earnings of $2.20 per share on $9.3 billion in sales for the current quarter. On the midpoint of its guidance, that is based. Wall Street expected Jabil to report first-quarter fiscal earnings of $2.11 per share on sales of $8.93 billion. It generated $1.92 in profit per share on $8.57 billion in revenue during the same time last year. Jabil additionally disclosed plans to repurchase up to $1 billion worth of its stock. According to IBD MarketSmith charts, JBL stock has established a cup-and-handle foundation with a purchase point of 65.98. Electronics manufacturing services and diversified manufacturing services are Jabil's two business divisions. Equipment for 5G wireless, cloud computing, networking, data storage, industrial, and other applications is produced by the electronics manufacturing facility. The company's diverse production facility produces mobile, medical, automotive, and other gadgets. Sales of diversified manufacturing increased 13% while sales of electronics manufacturing increased 32% year over year at Jabil. According to IBD Stock Checkup, JBL stock is tied for first place out of 15 stocks in the electronics contract manufacturing business group. It gets a 98 out of 99 IBD Composite Rating. Regardless of industry sector, the Composite Rating compares a stock's main growth characteristics to all other companies. Out of 197 industry groups that IBD monitors, the electronics contract manufacturing industry group comes in at number 33. JBL stock is also included in IBD's list of Tech Leaders stocks. JBL Price Chart Sources: finance.yahoo.com, investors.com
Sticky US Inflation Expected to Maintain Dollar Strength Ahead of FOMC Meeting

Elon Musk To Go Through With Twitter (TWTR) Deal After All

Rebecca Duthie Rebecca Duthie 05.10.2022 11:25
Summary: On Tuesday Musk renewed his offer to buy Twitter. TWTR share price jumped in the wake of the news. “X, the everything app” TWTR stock price jumped Elon Musk attempted to pull out of the high-profile transaction, but on Tuesday he renewed his offer to pay $44 billion for the social networking site Twitter. The Tesla entrepreneur suggested the price in a letter to Twitter that was sent on Monday to the Securities and Exchange Commission. The price is equal to the original valuation of $54.20 per share. Late on Tuesday, Mr. Musk finally spoke up about the deal, writing on Twitter, "Buying Twitter is an accelerant to inventing X, the everything app." The price of the social network's stock increased so dramatically when it was revealed that Elon Musk is trying to restart his acquisition of the company that runs it that the New York Stock Exchange twice had to temporarily halt trading, according to the Wall Street Journal. The "Flash Crash" of 2010 prompted the implementation of such pauses, which begin when stocks on major indexes change price by more than 5% in less than five minutes. On Tuesday, Twitter shares increased by at least 12% at various points as Elon Musk declared he would stick with his original $44 billion offer to buy the social media platform. After purchasing Twitter Inc., Elon Musk teased "X, the everything app." According to the billionaire's prior remarks, the service may resemble the popular Chinese app WeChat. Beyond a single-line tweet, Musk didn't offer much information. However, the CEO of Tesla Inc. has admitted to admiring the Tencent Holdings Ltd. app, which has evolved from a messaging service to a mini-internet used by more than a billion people from China users daily. He has expressed thoughts on improving Twitter, saying he wants it to be more like WeChat and TikTok, the popular video-sharing app owned by ByteDance Ltd. that has gained popularity in the US. He also drew comparisons to the so-called "super apps" that are popular in some parts of Asia and allow users to access a variety of services from communications to car summoning using a single smartphone application. TWTR Price Chart Sources: finance.yahoo.com
OPEC+ To Reduce Oil Output By 2 Million Barrels Per Day

OPEC+ To Reduce Oil Output By 2 Million Barrels Per Day

Rebecca Duthie Rebecca Duthie 06.10.2022 17:08
Summary: OPEC+ to reduce output to drive up prices. Energy costs have risen as a result of the supply shortage. OPEC+ decision to reduce oil output The biggest reduction in production since the epidemic began in 2020, OPEC+ said on Wednesday, October 5, that it will cut output by 2 million barrels per day (bpd). The decision was quickly criticized by the White House as "shortsighted," and the oil cartel was charged with "aligning with Russia." President Joe Biden's advice to refrain from taking such a dramatic measure has not been heeded by Saudi Arabia, which controls approximately one-third of OPEC's oil reserves and is seen as a US ally. In order to persuade the de facto ruler of the kingdom, Crown Prince Mohammed Bin Salman, to increase the number of barrels pumped, Biden visited the country in the Middle East three months ago. The output decrease is intended to raise oil prices back to the triple digits of dollars after a four-month decline. Oil prices have already risen to more than $90 a barrel as a result of anticipation of OPEC's decision this week. Saudi Arabia's move, which is probably motivated by politics and oil pricing equally, reminds the West who is in charge of this valuable resource and has caused the US to rethink its foreign policy goals, including sanctions against Venezuela. OPEC+ decision effects Due to underproduction by OPEC and its partners, the actual production reduction will be less than 2 million. The coalition fell short of its goals by 3.58 million barrels per day in August. In Nigeria, for instance, pipeline theft and vandalism caused oil production to reach a 32-year low. The true cuts will only amount to about 1 million bpd, according to Saudi Energy Minister Abdulaziz bin Salman, and analysts estimate even smaller reductions, as reported by Reuters. Energy costs have risen as a result of the supply shortage, which has been made worse by Russia's involvement in the conflict in Ukraine. Biden used the US Strategic Petroleum Reserve earlier, in May, to control the rise in oil prices and, consequently, gasoline costs. He might have to turn to releasing more oil after the OPEC+ cuts. Crude Oil Nov ‘22 Futures Price Chart Sources: finance.yahoo.com
European Markets Face Headwinds Amid Rising Yields and Inflation Concerns

NVIDIA (NVDA) Stock Price Dropped On Tuesday

Rebecca Duthie Rebecca Duthie 11.10.2022 19:37
Summary: The Biden administration's decision to limit electronics exports to China last week. Citigroup reduced Nvidia's price objective by $38 to $210 per share. Nvidia (NVDA) share price drops due to biden administration Following the Biden administration's decision to limit electronics exports to China last week, Nvidia (NVDA) led chip stocks lower on Tuesday amid a flurry of analyst downgrades and broader sector repricing. Late last week, Advanced Micro Devices (AMD) issued a warning regarding near-term revenue growth, and weakening PC and smartphone demand also put pressure on already-weak chipmakers. Additionally, President Joe Biden's decision to severely restrict the sale of equipment to China-based companies used in the production of advanced semiconductors gave further downside momentum. In the United States, Intel also suffered as a result of analysts at Wells Fargo lowering their price target on the chipmaker and noting a steep drop in near-term sales amid broader sector weakness. In contrast, Citigroup reduced Nvidia's price objective by $38 to $210 per share due to slowing growth rates in the market for cloud computing hardware. Nvidia shares fell 2.4% in early Tuesday trading to trade at $113.85 per share. The Biden administration announced further extensive restrictions on the sale of semiconductors and related equipment to China on Friday. Then, today, the International Monetary Fund (IMF) lowered its projection for global growth, hurting morale as well. And to top it all off, the Chinese government has decided to lock down major cities once more in an effort to stop the spread of COVID-19, which has recently caused supply chain issues. The new limits on high-end processor sales to China could notably hurt Nvidia. Although the administration had already ordered Nvidia to stop selling its top-tier data center GPUs to China back in late August, the administration's latest limitations on equipment sales to China last week only serve to further cement the two nations' technical separation. It's important to note that Nvidia estimated that the limits would affect around $400 million in revenue, or about 7% of projected revenue, if they were completely enforced. NVDA Price Chart Sources: finance.yahoo.com, thestreet.com, fool.com
Chart of the Week - Gold Miners vs Energy Producers - 20.04.2022

German CPI Inflation Data Met The Markets Expectations

Rebecca Duthie Rebecca Duthie 13.10.2022 08:15
Summary: German CPY (YoY) CPI inflation data met market expectations. Looming european energy crisis. Initial market reactions. German CPI inflation data comes in at 10% Preliminary estimates showed that in September 2022, Germany's consumer price inflation spiked to 10 percent year-over-year, the highest level ever and significantly more than the 9.4 percent market projection. Following a worsening energy crisis in the biggest economy in Europe and ongoing supply chain disruptions, consumer prices have been rising. The German CPI inflation data was forecasted at 10% and came in at 10%, in addition the German CPI (MoM) data also met market expectations and remained equal to the previous months at 1.9%, this indicates that the largest European economy has not worsened despite fears. With the war in the Ukraine continuing, and the sanctions placed on Russia by the European Union, it is no secret that the European economies are facing problems, driven by a looming energy crisis. With winter approaching and a shortage of gas forecasted, prices have been rising. The European Central Bank’s (ECB) interest rate hawkish interest rate hiking cycle is showing no signs of slowing down, Inflation data from Europe's largest economy tends to be a clear indication of the performance of the rest of the European Economies. In the wake of the previous German CPI inflation data release, separate statistics revealed that previously, consumer and business expectations for greater inflation and a worsening financial situation caused the euro zone's economic mood to decline significantly and more than anticipated. The effect of the CPI Inflation Data on the Markets As CPI inflation continues to rise, consumer confidence continues to fall, the actual figures set up a strong case for the European Central Bank to continue on their interest rate hiking cycle path. The initial effect of the released data caused the EUR/USD to strengthen slightly, the EUR/GBP had the same effect, strengthening as the German Inflation rate remained high, yet stable. Sources: investing.com, reuters.com, dailyfx.com
Both The US CPI & Core CPI Inflation Beat Market’s Forecasted Figures

Both The US CPI & Core CPI Inflation Beat Market’s Forecasted Figures

Rebecca Duthie Rebecca Duthie 13.10.2022 15:19
Summary: US CPI inflation beat market expectations. US Core CPI inflation beat market expectations. Initial market reaction. US CPI & Core CPI Inflation beat market expectations After breaking out last week, the US dollar is maintaining its recent highs. The primary US catalyst for this week is the release of CPI data today. According to economists surveyed by Reuters, the CPI is anticipated to have risen by 8.1% in September compared to the same month a year prior, which is only slightly less than the 8.3% annual increase seen in August. The actual US CPI inflation (YoY) came in at 8.2%, beating market expectations. For the White House and legislative Democrats, the continued high inflation has been a major political concern, overshadowing the coronavirus pandemic's quick recovery and the creation of millions of jobs since Joe Biden took office. The Core CPI is anticipated to rise for a second consecutive month, with the rate rising to 6.5% in September from 6.3% in August. Additionally, the Summary of Economic Projections (SEP) shows a higher path for US interest rates, which could fuel anticipation for another 75bp Fed rate hike. The actual US Core CPI inflation (MoM) came in at 6.6%, also beating market expectations. Effect on the markets The market will probably jerk in either direction after the September CPI report is released. The bar remains very high to change the perception surrounding a 75 basis point rate hike from the FOMC in November, despite the possibility of volatility across asset classes. The Federal Reserve may face pressure to maintain its approach to battling inflation if the core CPI increases once again, according to the minutes from the September meeting that revealed “many participants emphasized that the cost of taking too little action to bring down inflation likely outweighed the cost of taking too much action.” The initial reaction from the EUR/USD was bearish, USD/JPY was bullish as the dollar strengthened in the wake of the news, the S&P500 also jumped and Bitcoin remained on a downward trend. Sources: investing.com, financialtimes.com, finance.yahoo.com, dailyfx.com
TEST

Dow Jones Increased Overnight, GBP Could Rally If UK Leadership Changed

Rebecca Duthie Rebecca Duthie 19.10.2022 11:27
Summary: Dow Jones futures all increased overnight as investors focused on Netflix (NFLX). The near-term outlook for the pound has significantly improved. Dow Jones Index Rally The S&P 500, Nasdaq, and Dow Jones futures all increased overnight as investors focused on Netflix (NFLX) subscriber growth and anticipated Tesla earnings. The effort at a stock market rally extended advances on Tuesday, but the session ended well below highs. Although the market rise is still going strong, nothing yet has been proven. Investors should exercise caution and pay great attention. In Q3, Netflix's subscriber growth was substantially stronger than anticipated, and the leader in streaming TV is optimistic about Q4 subscribers. Earnings also exceeded expectations. The rise in Netflix's shares suggested a breakout. Overnight, Roku (ROKU) and Disney (DIS) both increased. In comparison to fair value, Dow Jones futures gained 0.6%, with DIS stock contributing a slight gain. Futures for the S&P 500 rose 0.7%. Futures for the Nasdaq 100 rose 1.4%. United Airlines and NFLX stock both make up the S&P 500 and Nasdaq 100. DJI Price Chart GBP could rally in the wake of UK leadership change The near-term outlook for the pound has significantly improved, according to foreign exchange strategists at BMO Capital, and more gains are possible if the UK leadership is changed in the next two weeks. They claim that such a development is very plausible. The call follows the dramatic about-face in UK fiscal policy that newly-installed Chancellor Jeremy Hunt revealed. In order to fully restore market confidence in the UK government and finances, Hunt undid all of his predecessor's tax cuts. This was followed by a decline in UK gilt yields and a rise in the value of the pound. The reversal was unavoidable given that the world markets recoiled at the generosity of the new prime minister Liz Truss' economic plans, which called for large tax cuts that would be paid for by borrowing.
The Markets Still Hope That The Fed May Consider Softer Decision

Eurozone CPI Inflation Came in Lower Than Expected

Rebecca Duthie Rebecca Duthie 19.10.2022 13:11
Summary:  Eurozone CPI inflation came in lower than expected. CPI inflation drops for the first time since May 2022. Initial market reactions. The Eurozone CPI inflation  The market had originally forecasted a CPI (YoY) inflation of 10% for the Eurozone, the actual figure came in at 9.9%, missing market expectations slightly. This could indicate to the market that the European Central Bank should continue its interest rate hiking cycle.  The falling inflation during September marks the first drop in Eurozone CPI inflation since May 2022. The falling inflation could provide the European Central Bank with an incentive to continue on their hawkish interest rate hiking path.  Effect of the CPI inflation data When the European Central Bank meets again at the end of the month, it is anticipated that it will boost its benchmark interest rates by an additional 75 basis points, adding to the total number of rises announced since July of 125 basis points. However, the Euro Area is predicted to "stagnate later in the year and in the first quarter of 2023," and the fear of a weakening economy may induce the central bank to implement lower rate increases over the following months. With the U.K. inflation figures, concerns that central bank tightening may cause a worldwide downturn have reemerged, reversing the previous upbeat feeling brought on by solid earnings reports and dissipating concerns about systemic risk from Britain's debt markets. The U.K’s hotter than expected inflation figure has also put pressure on the markets. In addition, the European economy has been weighed down by the conflict between Russia and the Ukraine, and the looming energy crisis. The Initial market reaction in the wake of the softer than expected CPI inflation data saw the Euro weaken against both the US Dollar and the Pound sterling. The initial market reaction saw both the HSBC shares and the iBEX index rise. Sources: finance.yahoo.com, marketsummary.com, ft.com, investing.com
This Week's Tesla Stock Split Could Be The Best Moment To Buy The Stock! Twitter Stock Price Plunged!

Tesla (TSLA) Stock Price Dropped Around 5.77% In Pre-Market Trading

Rebecca Duthie Rebecca Duthie 20.10.2022 15:23
Summary: Concerns that inflation & logistic difficulties may have slowed the EV manufacturer's development. Tesla fell short of automotive gross margin estimates. Tesla share prices down Tesla Inc. shares dropped by roughly 5% in pre-bell trading on Thursday as Wall Street analysts worried that growing inflation and logistical difficulties may have slowed the electric vehicle manufacturer's development. At least five brokerages reduced their price targets for the stock, with Wedbush Securities making the greatest reduction of $60 to lower its goal to $300 and citing softer deliveries in 2022. "The bullish narrative is clearly hitting a rough patch as Tesla must now prove again to the Street that the robust growth story is running into a myriad of logistics issues as opposed to demand softening," Wedbush analyst Daniel Ives wrote in a note. In premarket trade, the stock, which has lost 37% of its value this year, dropped 4.6% to $211.80. The company warned that difficulties it was having with logistics could prevent it from meeting its goal of a 50% increase in delivery volume this year in its quarterly results report. Elon Musk, the CEO of Tesla, acknowledged that "demand is slightly harder" than it would otherwise be on a post-earnings call, but he reiterated that the business was quite optimistic in having a record fourth quarter. Tesla fell short of automotive gross margin estimates despite increased selling prices for its vehicles due to manufacturing ramp-up costs at its new factories in Austin, Texas, and Berlin, Germany. However, other analysts believe Tesla will benefit greatly from the global transition toward electric automobiles. Elon Musk, Tesla's CEO, noted that demand was high while discussing the company's third-quarter profits. He did, however, issue a warning that deflationary tendencies in the economy were intensifying and that China and Europe were going through "a form of recession." TSLA Price Chart Sources: finance.yahoo.com, ft.com
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

UK Retail Sales Data Missed Market Expectations, Coming In Hotter Than Expected

Rebecca Duthie Rebecca Duthie 21.10.2022 08:41
Summary: U.K Retails data came in hotter than expected. Consumer spending has largely decreased in the U.K. UK Retail Sales Data UK Retail Sales Data heavily missed market expectations on Friday, with YoY data coming in at -6.9% and market expectations that were originally set at -5.0%, and MoM data also missing market expectations, coming in at -1.4% with expectations originally set at -0.5%. The data from both YoY & MoM missed market expectations by a long way, indicating that the U.K economy had deteriorated throughout September more than the markets had expected. Retail Sales track changes in the total amount of retail sales that have been adjusted for inflation. It is the most important gauge of consumer spending, which dominates all other forms of economic activity. The lower than expected readings could be interpreted as bearish or negative, as consumers in the U.K heavily slowdown the spending as the looming recession becomes more real. Effect on the market It could be said that the retail sales help investors to gauge the health of an economy and the existence of inflationary pressures. Consumer spending makes up a large part of the U.Ks GDP, the figures that largely missed market expectations could be interpreted as the U.K economy heading into a recession. The market could expect that the Bank of England (BoE) will continue on their interest rate hiking cycle, and perhaps we could see the BoE turn even more hawkish in their fight against rising inflation. The initial market reaction for the GBP/USD currency pair saw the GBP weaken against the USD, the same goes for the EUR/GBP currency pair, which saw the EUR strengthen against the GBP initially. The FTSE 100 is up as of the release of the Retail Sales Data. Sources: finance.yahoo.com, poundsterlinglive.com, ft.com
SEK: Riksbank's Impact on the Krona

SNAP Inc. Share Price Crashes 30%, BHP CEO Optimistic About China’s Economic Prospects, Fed’s Hawkishness

Rebecca Duthie Rebecca Duthie 21.10.2022 16:38
Summary: Snap’s Q3 earning results missed market expectations. BHP is optimistic about China's growth prospects. Fed remains hawkish in interest rate hiking cycle. SNAP stock crashing After another difficult quarter, the stock price for Snap is still declining. In pre-market trading on Friday, shares of the social networking platform fell 25% as third quarter sales showed a fifth consecutive quarterly slowdown. Additionally, profits were disappointing, as Snap continued to attribute the poor execution to a slowdown in advertising and changes to Apple's privacy policies. The business issued a warning that the fourth-quarter sales trends would deteriorate. Snap Inc. Q3 earnings missed market expectations. Average Revenue Per User: $3.11 vs. $3.17 forecast, Daily Active Users: 363 million vs. 358 million estimate, Adjusted EPS: $0.08 vs. projected loss of $0.02, Net Sales: $1.13 billion vs. $1.14 billion estimate Guidance: Fourth-quarter revenue growth was "flat." $SNAP shares are still struggling in pre-market today after a dismal Q3 report. The stock is down almost 30% in pre-market, surpassing analyst estimates of a 23% swing. https://t.co/RD3FDZrEAT pic.twitter.com/j1CF7GKcTH — Yahoo Finance Plus (@yfinanceplus) October 21, 2022   BHP CEO optimistic about future production CEO of BHP Group Mike Henry stated on Friday that despite uncertainty, he was "cautiously optimistic" about China's economic prospects. The leader of the largest listed mining firm in the world stated in a pre-recorded interview at the FT Mining Summit in London: "There is uncertainty in China, but in our judgment, China is still going to give a bit of stability or underpinning to global economic development over the next 12 months."   With more than 250 million tonnes mined in the fiscal year ending in June, BHP is a leading producer of iron ore, which is used to make steel used in the construction industry. According to Henry, the multinational mining corporation is now looking into ways to boost iron ore productivity above 300 million tonnes annually. BHP chief pledges ‘disciplined’ M&A stance despite bulging war chest https://t.co/qoBC6jukwA — Financial Times (@FT) October 21, 2022 Federal Reserve to remain hawkish In general, the US dollar is higher so far today as markets assess the week before the weekend. After soaring once further in the US session, Treasury rates across the curve are a few basis points higher in Asian trade. Today's 4.27% yield on the benchmark 10-year bond was the highest since 2008. ⚠️BREAKING:*FED SET TO RAISE RATES BY 0.75 POINT AND DEBATE SIZE OF FUTURE HIKES - WSJ$DIA $SPY $QQQ 🇺🇸 🇺🇸 pic.twitter.com/eWNuHX0skh — Investing.com (@Investingcom) October 21, 2022 Sources: finance.yahoo.com, twitter.com, dailyfx.com
Meta Is Cutting Discretionary Spendings And Extending Its Freeze On Hiring

SNAP Inc Share Price Weighed Down By Disappointing Q3 Earnings Results

Rebecca Duthie Rebecca Duthie 21.10.2022 19:56
Summary: SNAP may need to make even more job cuts. Summary of Snap's difficult quarter. Price of Snap fell by close to 30% on Friday. SNAP Inc Share Price down 30% One veteran tech analyst expressed concern that Snap (SNAP) may need to make even more job cuts than it had first anticipated due to the third quarter's steeper than anticipated decline in business. After the social media platform disclosed that third-quarter sales slowed for the fifth consecutive quarter, the price of Snap fell by close to 30% on Friday morning. Throughout the session, the company's shares dominated Yahoo Finance's "Trending Ticker" page. Snap said at the end of August that it would lay off 1,300 workers, or 20% of its staff. Despite the recent round of major layoffs, Snap continues to blame a slowdown in advertising and Apple's (AAPL) privacy rules for its executional blunders as third-quarter profitability lagged. The business also issued a warning that the fourth-quarter sales trends will deteriorate. Here is a summary of Snap's difficult quarter: Net Sales: $1.13 billion vs an anticipated $1.14 billion, 363 million versus an expected 358 million daily active users, $3.11 as opposed to the predicted $3.17 for average revenue per user Adjusted EPS: $0.08 vs a loss of $0.02 expected, Guidance: Fourth-quarter revenue growth was "flat." "Yes, I mean they do [have to cut expenses more]," Jefferies Analyst Brent Thill mentioned on Yahoo Finance Live. "They just restructured the company. They obviously are in the process of still reducing the workforce by 20%. They may have to go deeper." Shares of the photo-focused social media behemoth Snap (SNAP) are currently 30% down than their 52-week highs after it released poor third-quarter earnings. Additionally suffering from the stock shift are companies like Meta (META), Alphabet (GOOGL) (GOOG), Pinterest (PINS), and others. Some of these businesses are being helped by the fact that U.S. stocks are rising in the first part of Friday's session, but not Snap. SNAP Price Chart Sources: finance.yahoo.com, thestreet.com
The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)

Broad China Selloff Drags Down Alibaba, European Gas Prices Down, Goldman Sachs Aim To Increase Investment In China, Race For Next U.K PM

Rebecca Duthie Rebecca Duthie 24.10.2022 13:40
Summary: Alibaba stock tanks on Monday. Warmer weather prospects driving NGAS down. Goldman Sachs has established a new joint venture in China. Rishi Sunak on track to become the next U.K Prime Minister. Markets reacted to President Xi Jinping’s re-election As markets reacted to President Xi Jinping consolidating power following his historic confirmation to a third term as head of the second-largest economy in the world, shares of Chinese corporations were falling on Monday. Alibaba (ticker: BABA) lost 12% in premarket trade in the United States. Investors are spooked by President Xi Jinping's increasing control over China's ruling party as he begins a record-setting third term with no apparent successor. In addition, the 14th edition of the 11.11 Global Shopping Festival ("11.11" or "Festival"), which will feature more than 290,000 brands, was formally launched today by Alibaba Group Holding Limited. ⚠️BREAKING:*ALIBABA STOCK PLUNGES 11% IN HONG KONG AMID BROAD CHINA SELLOFF$BABA 🇨🇳🇭🇰 pic.twitter.com/qd0XErYE4B — Investing.com (@Investingcom) October 24, 2022 European gas prices fall as supply prospects improve Following predictions of warmer-than-usual weather for the majority of the continent over the coming week, European natural gas futures fell once again during the opening hours of trading on Monday. Weather predictions that continental Europe will see temperatures this week that are between 4 and 8 degrees Celsius warmer than the seasonal norm, predicting reduced demand and enabling importers to continue injecting excess gas into storage, served as the primary impetus for the decision. ​​In order to relieve the pressure brought on by Russia's effective supply suspension, Europe has been able to fill its storage facilities ahead of schedule thanks to a mild start to the winter heating season and aggressive buying of liquefied natural gas on spot markets. EU storage facilities were 93.4% full as of Sunday, with the two largest markets on the continent, Germany and Italy, posting even higher levels. ⚠️BREAKING:*EUROPEAN GAS PRICES TUMBLE TO LOWEST SINCE JULY ON EASING SUPPLY FEARS 🇪🇺🇪🇺 pic.twitter.com/nGg49xSG1T — Investing.com (@Investingcom) October 24, 2022 Goldman Sachs’ new joint venture In an effort to increase investment in Chinese logistics and infrastructure real estate assets, Goldman Sachs has established a joint venture in China with local logistics firm Sunjade, the U.S. bank announced on Monday. According to a company release, the bank is creating the new subsidiary through its investment arm Goldman Sachs Asset Management, which has made more than $50 billion in real estate-related investments worldwide. The stock structure or the amount of money committed to the platform were not disclosed. The joint venture has invested in a 240,000 square meter project with four institutional-grade warehouse assets in Shanghai and the surrounding region. The joint venture focuses on projects in China's first-tier cities and neighboring areas. The new platform, according to the U.S. bank, will profit from China's growing demand for brand-new, high-quality infrastructure assets, particularly institutional-quality storage space driven by e-commerce and the diversification of industrial requirements supported by government policies. Goldman Sachs launches Chinese infrastructure real estate joint venture https://t.co/HdGJm9ExlH pic.twitter.com/mmj53hkACz — Reuters Business (@ReutersBiz) October 24, 2022 Rishi Sunak on track to be next U.K PM After Boris Johnson withdrew from the race on Sunday night and the markets breathed a sigh of relief, Rishi Sunak, a former chancellor, was on track to become the new prime minister of Britain on Monday. After the likelihood of further imminent political and economic unrest decreased, the value of the pound increased on Monday. Johnson, who was having trouble gaining support, acknowledged that due to divisions among Tory MPs, even if he had won, he could not have governed "effectively." If Penny Mordaunt, the leader of the Commons and his sole remaining competitor, is unable to secure the necessary 100 nominations from Tory MPs, Sunak will take over as the party's leader at 2 p.m. on Monday. Rishi Sunak’s priority should be to restore stability and the UK’s reputation https://t.co/WLKJCGg49X — Financial Times (@FT) October 24, 2022 Sources: finance.yahoo.com, ft.com, twitter.com
This Week's Tesla Stock Split Could Be The Best Moment To Buy The Stock! Twitter Stock Price Plunged!

Tesla Lowers Starting Price Of Selected EV Models

Rebecca Duthie Rebecca Duthie 24.10.2022 13:00
Summary: TSLA stock's six-month fall is sitting around 37.8%. Tesla is lowering the starting price of its Model 3 and Model Y, in China. China, the world's largest EV market, is still constrained by Beijing's "zero COvid" policy. Tesla car model price lowering For the first time this year, Tesla is lowering the starting price of its Model 3 and Model Y cars in China. After lowering pricing for the first time this year for cars built in China, Tesla (TSLA) shares continued to fall on Monday, indicating waning demand in the largest market in the world. Just days after its third quarter earnings report echoed the impact of rising production costs and showed narrowing profit margins for the most valuable automaker in the world, Tesla reduced the starting price of its Model 3 sedan by about 5.3% and cut the cost of its Model Y by 9%. Tesla has been increasing the costs of its American-made cars for much of the year. Tesla reported that due to an increase in input prices and expenses associated with the start-up of new plants in Austin and Berlin, gross automotive margins were 27.9%, a 600 basis point decrease from last year and unchanged from the amount achieved over the second quarter. The company also warned that as it "simplifies operations, reduces costs, and improves the experience of our consumers," full-year deliveries "may fall slightly short of its 50% growth target." In pre-market trading, Tesla shares were marked 3.5% lower to reflect an opening bell price of $207 per share, bringing the stock's six-month fall to about 37.8%. Following record quarterly sales of 343,830 vehicles, Tesla stated last week that revenues increased 56% from the previous year to $21.45 billion, falling short of analysts' expectations of a $21.96 billion total. Demand is anticipated to decline over the course of the year as countries in Europe and North America hold off on major purchases due to recession fears and the continued rise in energy prices, while China, the world's largest EV market, is still constrained by Beijing's "zero COvid" policy. TSLA Price Chart Sources: finance.yahoo.com, thestreet.com
In The Coming Days Will Be The Final Consolidation Of Bitcoin

Chinese Renminbi Hits Lowest Level In 15 Years, Transfer Of UK PM Status, EU Stocks Supported By Potentially Dovish Fed, Bitcoin Forecast

Rebecca Duthie Rebecca Duthie 25.10.2022 13:00
Summary: The value of China's currency has decreased 13% so far this year.  U.S. economy shrank for a fourth consecutive month.   Chancellor Rishi Sunak was named the next prime minister. Bitcoins new price objective set at $30,000. The Renminbi is crashing The value of the Chinese yuan against the dollar has fallen to its lowest level since 2007 as worries over President Xi Jinping's choice of a more hardline leadership team and the weakening economy moved from stock markets to currency markets. A growing interest rate disparity with the US has already hurt the renminbi this year; on Tuesday, it dropped as much as 0.6% to Rmb7.3084 per dollar. The People's Bank of China lowered the midpoint of the currency's trading band to its lowest level since the world financial crisis, which caused the decline.  The value of China's currency has decreased 13% so far this year. The decline on Tuesday came after a sell-off in Chinese stocks that affected markets around the world this week, with the Hang Seng China Enterprises index falling more than 7% on Monday and the Nasdaq Golden Dragons index of major technology stocks falling more than 14%. China’s renminbi has hit its weakest level against the dollar since 2007 following concerns over President Xi Jinping’s appointment of a harder line leadership team and a struggling economy https://t.co/F96TYsSrcE pic.twitter.com/8niDscsIu5 — Financial Times (@FinancialTimes) October 25, 2022 Rishi Sunak takes over from Truss This week saw a solid start for the pound, but it was unable to continue its upward trend when former chancellor Rishi Sunak was named the next prime minister-designate after the Conservative Party leadership contest, which will have a major impact on the pound and the UK economy going forward. After former Prime Minister Boris Johnson withdrew from the race for the position of Prime Minister, leaving former Chancellor Rishi Sunak on course for a coronation that is expected to produce the UK's fifth Prime Minister in the past six years on Tuesday, sterling increased against most major currencies to start the new week.  The Pound, however, quickly lost its early gains as newly-elected Prime Minister Rishi Sunak warned of impending economic hardship and difficult choices involving the public finances in a speech to parliament.  Follow the latest developments as Rishi Sunak takes over from Liz Truss as UK prime minister https://t.co/pEjylJrgRO — Bloomberg (@business) October 25, 2022 EU Stocks supported by potentially dovish fed While anxiety over China's economy continued to weigh on Asian markets, European stocks climbed in early trade on Tuesday as investors took heart from indications that the U.S. Federal Reserve could scale back its rate increases. Data released on Monday revealed that the U.S. economy shrank for a fourth consecutive month. This suggests that the Fed's rate hikes have weakened the economy, which in turn has fueled optimism that the central bank may start to moderate the pace of the increases.  The projected Fed rate peak has decreased slightly from over 5% early last week to around 4.93%. The European stock market's mood was also helped by certain profit results that exceeded forecasts, with Swiss bank UBS (UBSG.S) among those that did so. However, the biggest bank in Europe, HSBC, announced a 42% decline in third-quarter profit, which caused a 4% decline in its share price (.HSBA.L). European stocks up as investors see signs Fed could slow rate rises https://t.co/a5VwuwKWFZ pic.twitter.com/ONhjztqvLs — Reuters (@Reuters) October 25, 2022 Bitcoin Forecast revised upwards to $30,000 In the coming month, Bitcoin "will break out dramatically," with a price objective of $30,000.  Michal van de Poppe, the founder and CEO of the trading company Eight, made that most recent forecast. On October 25, Van de Poppe tweeted his support for the analysts who are predicting a rise in the price of bitcoin. BTC/USD is now characterized by a notable lack of volatility, but there are growing indications that the sideways trend is about to undergo a significant change.  Popular analyst TechDev and others have confirmed that Bitcoin's Bollinger Bands versus the Nasdaq are the tightest in history, which all but guarantees an explosive move to come. “Market looking good for a last leg up. Higher highs and higher lows on ltf and demand being moved up,” he tweeted.   Analyst puts Bitcoin price at $30K next month with breakout due - https://t.co/IKtVBdXcef — Investing.com News (@newsinvesting) October 25, 2022 Sources: twitter.com, cointelegraph.com, reuters.com, ft.com, investing.com, poundsterlinglive.com
Energy Companies Will Likely Reveal Another Excellent Quarter

General Electric (GE) Cash Goal Delayed In The Wake On Supply Chain Issues - According To CEO

Rebecca Duthie Rebecca Duthie 25.10.2022 18:45
Summary: GE is on pace to reach the low end of its projection due to "external pressures" like inflation. 27% increase in aerospace sales. General Electric (GE) Q3 Earnings The industrial group's cash flow rebounded in the second quarter thanks to GE's aerospace business, but the company issued a warning that its working capital would be put under strain as it protected its clients from the full effects of supply chain disruptions for the remainder of the year. After GE separated its healthcare and energy businesses, Larry Culp, the company's chief executive, said the group was adhering to its forecast that full-year adjusted profits per share would range between $2.80 to $3.50 per share. With the exception of cash, where delayed renewable energy orders and the anticipated losses to working capital would "push out," or postpone, around $1 billion in free cash flow to a later date, GE was on pace to reach the low end of its projection due to "external pressures" like inflation. Before Tuesday's release, analysts' consensus projections for full-year earnings had already decreased to $2.80 per share from $3.20 three months prior when GE issued a warning about the effects of lockdowns in China and the war in Ukraine. A 27% increase in aerospace sales drove a 5% increase in GE's top line, and adjusted revenues of $17.9 billion exceeded analysts' forecasts of $17.6 billion. As a result of supply chain delays, services revenues in the aerospace industry increased by 47% while commercial engine deliveries decreased. According to GE, its strategy to divide into three publicly traded firms by 2024 with a focus on healthcare, energy, and aviation is still on track. As it advanced toward the three-way split, it claimed on Tuesday that it incurred "separation costs" of roughly $200 million in the second quarter. Culp said he was still optimistic that the plan will increase GE's worth in the long term when he made his remarks the same day that 3M revealed intentions to separate its own healthcare division. This month, GE made the following announcements: its healthcare division would be spun off early next year under the name GE HealthCare; its energy division would be rebranded as GE Vernova when it goes public in 2024; and Culp would oversee the remaining aviation division, which will be known as GE Aerospace. According to GE, the effects of inflation pressures would result in $3 billion in healthcare earnings for the entire year. It further stated that it no longer anticipated a "step up" in earnings at its renewable energy company in the second half of the year, blaming "paralysis in Washington" for a failure to meet expectations for the onshore wind turbine market.
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

NASDAQ Futures Down More Than 1.5%, Xi Jinping Pushes Out Youth League Members From Politburo, Spotify Users Up 20% YoY

Rebecca Duthie Rebecca Duthie 26.10.2022 12:15
Summary: NASDAQ weighed down by poor MSFT & GOOGL earnings. Xi's years-long campaign to destroy the faction was successful. Spotify surpassed expectations in terms of both paid and free user growth. NASDAQ down more than 1.5% on Tuesday On Wednesday, Nasdaq futures dropped more than 1% after poor financial statements from tech titans Alphabet (NASDAQ:GOOGL) and Microsoft prompted losses at other megacap firms and fueled concerns about slowing economic growth. While Alphabet, the parent company of Google, reported disappointing ad sales and warned of a slowdown in advertising expenditure, Microsoft Corp (NASDAQ:MSFT) reported its lowest sales growth in five years and anticipated second-quarter revenue below Wall Street estimates. In premarket trade, the businesses' shares plummeted 5.7% and 6.0%, respectively, while those of Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN), who are expected to release earnings this week, dropped 3.7% and 0.6%. The disappointing results come after Snap Inc. (NYSE:SNAP) issued a warning last week over sluggish ad demand and a string of mixed earnings reports, which have added to concerns that the economy is being negatively impacted by decades-high inflation and ad-hoc interest rate hikes to combat it. ⚠️BREAKING:*NASDAQ 100 FUTURES TUMBLE 1.8% AS GOOGLE, MICROSOFT SINK AFTER EARNINGS$QQQ $GOOGL $MSFT pic.twitter.com/2rd4B4bJjP — Investing.com (@Investingcom) October 26, 2022 China’s new president pushes out youth league members The three most notable absences from China's new Communist Party leadership have one thing in common: they all rose through the ranks of the Youth League and were regarded as representatives of a once-dominant clique, whose influence Xi Jinping has now successfully quashed. Even the larger Central Committee was bypassed as Xi installed supporters in key party positions during the recent twice-a-decade leadership reshuffle. Premier Li Keqiang and Vice Premier Wang Yang, both 67 and young enough to be re-appointed to the elite seven-member Politburo Standing Committee, were left out. Hu Chunhua, a fellow vice premier and former high flyer who, at 59, had been considered a prospect for premier and, at one point, even a potential future president, failed to make it to the 24-man Politburo. Analysts said the omissions demonstrate Xi's years-long campaign to destroy the faction was successful. China's Xi deals knockout blow to once-powerful Youth League faction https://t.co/g47pd77mil pic.twitter.com/uqSDoVgG2g — Reuters (@Reuters) October 26, 2022 Spotify up 20% on Users Spotify surpassed expectations in terms of both paid and free user growth in the third quarter, pointing to the region's strength in particular. A net addition of 23 million members, or 20% more than Spotify's previous projection, brought the total number of monthly active users (MAUs) to 456 million, which is the company's highest Q3 growth to date. The number of Spotify Premium subscribers increased to 195 million, up 7 million during the time (about 1 million more than expected) and 13% annually. Ek stated on the earnings call that Spotify is considering increasing the cost of its U.S. subscription plans in response to price increases by YouTube Premium and Apple Music. “[I]t’s something we will [discuss] with our label partners,” he said. “I feel good about this upcoming year, and what it means about pricing for our service.” Spotify (SPOT) reported a quarterly loss of $0.99 per share vs the $0.88 loss that the Zacks Consensus Estimate had predicted. This contrasts with a loss of $0.48 per share in the prior year. These numbers have non-recurring expenses taken into account. This quarterly report shows a -12.50% profits surprise. This music streaming service operator surprised analysts by posting a loss of $0.91 per share during the most recent quarter when it was anticipated that it would lose $0.68, a difference of -33.82%. The management's remarks on the earnings call will be largely responsible for determining if the stock's current price movement based on previously revealed numbers and anticipated future earnings can be sustained. Compared to the S&P 500's -20.3% decrease since the start of the year, Spotify share prices have fallen by around 59.6%. Spotify reaches 456M total monthly users in Q3, up 20% YoY and topping expectations https://t.co/vRe14ATA7s via @Variety CEO also said subscribers can expect price hikes for the service sometime in 2023. $SPOT shares are down 5% in after market trading. — Yahoo Finance (@YahooFinance) October 25, 2022 Sources: finance.yahoo.com, twitter.com, reuters.com, investing.com
KGL's Strong Q1 Results Raise Earnings Forecasts, But Long-Term Concerns Linger

Harley Davidson (HOG) Q3 Earnings Were Better Than Expected

Rebecca Duthie Rebecca Duthie 26.10.2022 18:01
Summary: The third-quarter results for Harley-Davidson HOG beat expectations. Harley's goals and plans for enhancing operational performance are called Hardwire. Harley stock had lost roughly 2% of its value as of Wednesday's trade. Harley Davidson beat market expectations The third-quarter results for Harley-Davidson HOG +11.15% were better than expected. The business is advancing in optimizing its processes. On Wednesday, Harley (ticker: HOG) announced $1.78 in earnings per share on $1.65 billion in revenues. Wall Street anticipated sales of $1.37 billion and a share price of roughly $1.40. Operating profit margins increased to 20.6% from 14.9% in the third quarter of 2021 and 17% in the second quarter of 2022, respectively. “ Harley-Davidson delivered a strong third quarter with solid growth for both revenue and operating income, aligned to our Hardwire strategic initiatives,” said CEO Jochen Zeitz in the company’s news release. “We are reaffirming our outlook for the year, and as we approach our 120th anniversary that we will be celebrating in our hometown Milwaukee and around the world.” Harley's goals and plans for enhancing operational performance are called Hardwire. In 2022, Harley anticipates a 20% to 25% increase in operating profits. That suggests operational revenue of around $1 billion in 2022. Currently, Wall Street is simulating around $870 million. Harley has generated operating profit of roughly $900 million so far this year. There is now roughly $100 million left to spend in the fourth quarter. Wall Street presently forecasts an operating profit for the time period of roughly $32 million. Harley stock had lost roughly 2% of its value as of Wednesday's trade, less than the corresponding 19% loss of the S&P 500. Following earnings, options markets predict that shares will change by about 8%, either up or down. In response to the last four quarterly reports, shares have changed by about 7%, either up or down. Over that time, shares have increased four times and decreased once. HOG Price Chart Sources: finance.yahoo.com, barrons.com
This Week's Tesla Stock Split Could Be The Best Moment To Buy The Stock! Twitter Stock Price Plunged!

Credit Suisse To Raise 4bn CHF To Fund Restructure, Tesla Inc. Under Criminal Investigation, Trading Of TWTR Shares Will Be Paused

Rebecca Duthie Rebecca Duthie 27.10.2022 12:37
Summary: Credit Suisse is essentially dismantling the investment bank. EV with self-driving capabilities was involved in many accidents. Musk has until October 28 to complete his $44 billion acquisition of TWTR. Credit Suisse to restructure Credit Suisse Group AG announced a restructure that will result in a multibillion dollar capital raising, thousands of job cutbacks, and the separation of the investment bank, taking the most drastic moves yet to restore the firm. According to a statement released on Thursday, the company intends to raise 4 billion francs ($4.1 billion) by selling shares to investors, including the Saudi National Bank, and through a rights issue. By splitting up the advice and capital markets businesses and selling the majority of its SPG business to Apollo Global Management Inc. and Pacific Investment Management Co., it is essentially dismantling the investment bank. After a string of significant losses and managerial upheaval destroyed Credit Suisse's reputation as one of the most respected institutions in Europe, the makeover is an urgent effort to rebuild trust. Ulrich Koerner, the bank's chief executive officer, and Chairman Axel Lehmann, who were appointed as crisis managers, now have the difficult task of carrying out the largest restructuring in the bank's recent history while attempting to safeguard the wealth management division that will determine its future. Credit Suisse seeks billions from investors in make-or-break overhaul https://t.co/MSy4Q4h7fT pic.twitter.com/e9mg3eUByl — Reuters Business (@ReutersBiz) October 27, 2022 TSLA under criminal investigation The National Highway Traffic Safety Administration (NHTSA) released its initial wave of data on car crashes involving vehicles with autonomous driving systems in June of last year as part of its attempts to increase traffic safety while still encouraging innovation. It came out that a very well-liked electric car with self-driving capabilities was involved in a lot more accidents than was previously thought. Ten months of data were covered in the June report. It showed that when employing fully autonomous capabilities like Tesla's Autopilot, ADAS-equipped vehicles crashed 392 times, with Tesla vehicles accounting for 273 of those collisions. It represents around 70% of the cases. Given this context, it was logical but yet surprising to learn that the Department of Justice is looking into Tesla as part of a criminal investigation. The revelation that the Department of Justice is looking into Tesla as part of a criminal probe made sense given this backdrop, but it was nonetheless unexpected. The Justice Department is looking into possible customer misinformation regarding the functionality and security of the self-driving feature. For the mere reason that Tesla emphasizes in its own materials that the cars are not yet capable of completely autonomous driving, it might be challenging to make any form of claim against the company over excessive promises. Tesla is under criminal investigation in the United States over claims that the company's electric vehicles can drive themselves, three people familiar with the matter said https://t.co/HQh5rvn54u pic.twitter.com/oGo5ZKtWqT — Reuters Business (@ReutersBiz) October 27, 2022 Musk to acquire TWTR by October 28th According to the website of the New York Stock Exchange, trading in Twitter Inc. (TWTR) shares will be paused on Friday because entrepreneur Elon Musk has until October 28 to complete his $44 billion acquisition of the social media platform. Musk, the richest man in the world, visited Twitter's San Francisco offices on Wednesday and implied that he was the company's top executive by changing his profile bio to "Chief Twit." Reuters stated on Tuesday that Musk's attorneys had provided the necessary documentation for the finance pledge to equity investors Sequoia Capital, Binance, Qatar Investment Authority, and others. The closing of the transaction would put an end to Twitter's litigation. Twitter, together with the investors, now anticipate that the transaction will close at the agreed-upon price of $54.20 per share. On Wednesday, the NYSE saw the company's stock close at $53.35 per share. They were trading slightly below Musk's offer price in extended trading, up nearly 1% at $53.90. *TWITTER WILL BE DELISTED FROM THE NYSE ON FRIDAY AFTER MUSK COMPLETES DEAL$TWTR pic.twitter.com/jasBHEMrJp — Investing.com (@Investingcom) October 27, 2022 Sources: twitter.com, investing.com, reuters.com, finance.yahoo.com, thestreet.com
USD/JPY Reaching 130-135? It Seems It Maybe Not Impossible

Credit Suisse Q3 Earnings Missed Market Expectations Sparking Major In-house Changes

Rebecca Duthie Rebecca Duthie 27.10.2022 17:04
Summary: Credit Suisse will cut their investment bank. The company will go to the market to raise capital. Shares were trading at or near record lows. Credit Suisse Q3 Earnings spark major in-house changed In order to restore investor trust and finance a protracted reconfiguration that will result in the elimination of its investment bank and a 9,000-person reduction in headcount, Credit Suisse Group AG decided to turn to investors for a painful multibillion-dollar capital raise. The firm's ambitions to raise 4 billion francs ($4.1 billion) through a rights issue and the sale of shares to investors like the Saudi National Bank caused the stock to fall as much as 16%. By splitting up the advice and capital markets divisions and selling the majority of a trading company to a group headed by Apollo Global Management Inc., it virtually dismantled the investment bank. The actions represent an urgent attempt by Credit Suisse to regain credibility after a string of significant losses and managerial instability destroyed its reputation as one of the most prominent lenders in Europe. Ulrich Koerner, the bank's CEO, and Chairman Axel Lehmann are already being questioned about whether the biggest transformation in the institution's recent history is drastic enough and provides suffering shareholders with enough reward. “The new Credit Suisse will definitely be profitable from 2024 onwards,” Koerner said in an interview with Bloomberg Television’s Francine Lacqua. “We do not want to overpromise and underdeliver, we want to do it the other way around.” As investors processed combined expenses connected to the reorganization of around $6.6 billion and the dilution effect of the share sales, the shares dropped 12% at 1:06 PM in Zurich. With a potential ownership of up to 9.9%, the capital increase may make Saudi National Bank, which is supported by the country's major sovereign wealth fund, one of Credit Suisse's largest shareholders. Given that the shares were trading at or near record lows, bank executives had hoped to avoid raising capital, but after observing the outflow of assets and deposits from rich clients, they ultimately chose to do so in order to strengthen the bank's finances. The bank reported a net loss of 4.03 billion francs for the third quarter and stated that it anticipated a loss for the entire year. The company announced that it will begin cutting 2,700 positions from its employees in the fourth quarter and that by 2025, it expects to have reduced its employment by around 9,000, to 43,000. By that time, it also wants to cut the cost base by 15%, or 2.5 billion Swiss francs. According to analysts at Citigroup Inc., Credit Suisse's 2025 goal of a 6% return on tangible equity "appears to lack ambition." The restructure takes place as a result of third-quarter results that highlighted the difficulties ahead. Wealthy clientele left as the investment bank struggled on. The bank reported a quarterly loss of more than $4 billion, which included an impairment of deferred tax assets associated with the restructuring worth 3.7 billion francs. Through 2024, the transformation will cost an additional 2.9 billion francs. CS Price Chart Sources: finance.yahoo.com, bloomberg.com
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

Eurozone Inflation Touches Record High, US Treasury, What To Watch At BoE Rate Setting Meeting

Rebecca Duthie Rebecca Duthie 31.10.2022 12:59
Summary: Consumer prices in the Eurozone reached a new record high. Investors in US government bonds are pleading with the Treasury department to intervene. The BoE will this week publish its latest decision on interest rates. Eurozone inflation rises for 12th consecutive month According to a flash estimate from the European Union's statistics office, consumer prices in the Eurozone reached a new record high for the twelfth consecutive month, driven by a persistent rise in energy prices. In October, annual inflation in the currency region increased by 10.7%, exceeding economists' expectations of 10.2% and up from the previous level of 9.9%. As a result of ongoing tensions regarding the provision of crucial Russian gas flows into Europe after the start of the war in Ukraine, energy costs increased by 41.9% during the month. Food, drink, and tobacco prices all went up 13.1%. Core inflation, which excludes volatile commodities like food and energy, registered at 5.0%, up from the previous reading of 4.8% and also higher than expected. Businesses have displayed symptoms of pessimism about the future, and economists anticipate that the Eurozone will enter a recession this year as a result of spillover effects from this skyrocketing inflation. According to Eurostat's flash statistics, which was also issued on Monday, the third quarter saw an unusually severe slowdown in economic development in the Eurozone. The seasonally adjusted gross domestic product increased by 0.2% when compared to the prior three months, which was less than the 0.8% increase seen in the second quarter and the 1.0% increase expected. In morning trade, the euro decline against the dollar and little changed thereafter. ⚠️BREAKING:*EURO ZONE ANNUAL INFLATION RATE JUMPS TO 10.7% IN OCTOBER, HIGHEST LEVEL ON RECORD 🇪🇺🇩🇪🇫🇷🇮🇹🇪🇸🇳🇱 pic.twitter.com/3qj1Ddy4dr — Investing.com (@Investingcom) October 31, 2022 Investors pleading with US Treasury department Investors in US government bonds are pleading with the Treasury department to intervene in the market in the hopes that this week will bring signs of potential buybacks following months of erratic price fluctuations and little liquidity. The fast rate hikes and quantitative tightening program implemented by the Federal Reserve this year have heightened the tension in the typically subdued $24 trillion Treasury market. When the Treasury announces its funding for the fourth quarter in the coming days, investors are hoping for hints about what it has in store. The cost of borrowing for the US government and the benchmark for prices across asset classes are determined by Treasury rates, which have fluctuated drastically in 2022. Even though the Treasury bond market is supposedly the most liquid in the world, the volatility has made it more difficult and expensive for investors to buy or sell Treasury bonds.Investors, strategists, and primary dealers anticipate that the Treasury will provide some information in the documents it releases this week after reviewing the survey's findings with them last week. The expected financing requirements for the fourth quarter and the Treasury's intentions for issuance will be revealed on Monday. Investors urge US Treasury to boost bond market liquidity with buyback scheme https://t.co/xlPeGVvvK2 — Financial Times (@FT) October 31, 2022 BoE to make UK economy estimates and interest rate decision The Bank of England will this week publish its latest decision on interest rates along with updated estimates for the UK economy in what is the most anxiously awaited monetary policy meeting in years. One of the most volatile periods in recent UK economic history preceded the BoE's most recent interest rate meeting on September 22. Liz Truss' "mini" Budget, which included £45 billion in unfunded tax cuts, caused a spike in government borrowing costs, necessitated an emergency BoE intervention, and increased mortgage rates for homeowners. In the government's autumn statement on November 17, the new prime minister Rishi Sunak promises a new economic plan that will demonstrate how debt would decrease as a share of gross domestic product over the medium term. Thus, without complete knowledge of Sunak's strategy, the BoE Monetary Policy Committee will be largely "flying blind" when it announces its interest rate decision on Thursday. Four things to watch out for are listed below. Interest rate decision. Economic growth and inflation forecasts. Quantitative tightening. Monetary policy management expectations. Four things to watch at the Bank of England’s rate-setting meeting https://t.co/u2hMRgYqu7 — Financial Times (@FT) October 31, 2022 Sources: ft.com, twitter.com, investing.com
Franc Records 11th Consecutive Daily Decline Against the Dollar as US Economic Concerns Mount

Non-transparent ETFs Have Been Struggling, Elon Musk Making Many Changes To Twitter, Pfizer COVID-19 Revenues Rise

Rebecca Duthie Rebecca Duthie 01.11.2022 16:14
Summary: Since non-transparent ETFs were introduced two years ago, they have had difficulty gaining popularity. Elon Musk continues to make Twitter changes. Tuesday saw Pfizer increase its Covid-19 vaccine sales projection. Non-transparent ETFs Since the initial products were introduced two years ago, non-transparent ETFs have had difficulty gaining popularity among investors, according to data. According to Bryan Armour, director of passive strategies research for North America at Morningstar, portfolio-shielding ETFs had $4.4 billion in assets as of September 30, making up around 1.5% of the active ETF market. However, according to Morningstar data, only one ETF, the $2.1 billion Nuveen Growth Opportunities ETF, has roughly half of those assets. After attracting attention from companies including BlackRock, Capital Group, Nuveen, Columbia Threadneedle, and American Century, non-transparent ETFs were given regulatory permission in December 2019. On March 31, 2020, American Century introduced the first actively managed non-transparent ETFs. According to the American Century website, the Focused Dynamic Growth ETF currently has $121 million and the Focused Large Cap Value ETF currently has $200 million. According to Armour, non-transparent ETFs have seen a decline in market share among active ETFs this year. According to him, active ETFs have organically increased by 19.8% year to date through September, outpacing non-active ETFs by 11.7 percentage points. Non-transparent ETFs have had a difficult time amassing assets in part because large broker-dealers have been reluctant to add the products to their systems. UBS, Merrill Lynch, and Morgan Stanley Wealth Management all announced this year that they will begin providing a limited selection of portfolio-shielding ETFs on their platforms. Overall, Nate Geraci, president of The ETF Store, stated that investor response to opaque ETFs has been "lukewarm at best" and "downright cold" at worst. Portfolio-shielding active ETFs struggle to gain ground https://t.co/ksLUzKPPkN — Finance News (@ftfinancenews) November 1, 2022 Twitter CEO continuing to make changes The Wall Street Journal reported on Tuesday that Twitter Inc., which billionaire Elon Musk acquired last week, will no longer permit customers of its Blue service to see content without advertisements. In June of last year, Twitter Blue, the platform's first subscription service that provided exclusive access to premium features including the ability to edit tweets, was introduced. Subscribers had access to some publishers' articles without being interrupted by adverts through the service. Last month, the social media site in the US made an edit option available to premium subscribers. According to news sources, Twitter is preparing additional modifications to its $4.99 per month Blue subscription tier, including adding user authentication. Musk added that charging a charge was the best way to "fight the bots & trolls" in a response to author Stephen King on Tuesday, asking if $8 was a price he would pay to be a verified user. $TWTR platform changes under Elon Musk “is literally like throwing spaghetti on the wall and seeing what sticks,” @binance CEO @cz_binance says, adding: “There should be new features every month, every week, every day.” pic.twitter.com/iUsW6pGH9C — Yahoo Finance (@YahooFinance) November 1, 2022 Pfizer revenue rises due to increase in COVID-19 vaccine sales Tuesday saw Pfizer increase its Covid-19 vaccine sales projection by $2 billion to $34 billion as higher pricing offset a drop in demand outside of the US. The US manufacturer claimed that high sales of several of its other medications and its bivalent booster, which targets the dominant strain of the Omicron type, helped it to somewhat offset the negative effects of a strong dollar. As a consequence of third-quarter results that exceeded analysts' estimates and allayed fears about waning demand for Covid products, the business kept its full-year target of $22 billion for sales of the Covid antiviral medication Paxlovid. Shares of Pfizer increased 3.5% in pre-market trading to reach $48.10. Pfizer reported third-quarter sales of $22.6 billion, which were more than experts had anticipated but were down 6% from the same period a year earlier when the pandemic was at its worst. The business raised its estimate for full-year 2022 earnings to a range between $6.40 and $6.50 per share. Additionally, it reduced its projected revenue to a range of $99.5 billion to $102 billion. 💉 Pfizer raises revenue view on higher-than-expected Covid-19 vaccine sales https://t.co/XlgVgQiGGl via @WSJ $PFE is +3.22% in pre-market trading. — Yahoo Finance (@YahooFinance) November 1, 2022 Sources: Twitter.com, ft.com, finance.yahoo.com
Disappointing German March macro data increase risk of technical recession

Airbnb Q3 Earnings Beat Market Expectations, ECB Puts Pressure On Banks Regarding Climate Change, Credit Suisse Just Misses Junk Status

Rebecca Duthie Rebecca Duthie 02.11.2022 13:58
Summary: Airbnb Q4 earnings look dim. ECB to increase capital requirements for banks if they do not address climate change risks. S&P Global Ratings reduced Credit Suisse Group AG's. Airbnb anticipating poor booking outlook for Q4 Shares of Airbnb Inc. dropped after the firm provided a poor booking outlook for the fourth quarter, signaling that consumer preferences are changing back to urban and international locations rather than the more expensive rentals that were popular during the pandemic. In comparison to the third quarter's rise of 25%, the home-sharing platform said it anticipates the pace of nights and experiences booked will "slow significantly" in the fourth quarter. In the three months that ended in September, Airbnb reported 99.7 million nights and experiences booked, underperforming analysts' expectations of 99.9 million. Prior to the New York stock exchanges opening, the shares decreased by nearly 6% in premarket trading. In trading on Tuesday, the stock increased 2% to settle at $109.05 after falling 35% this year. Additionally, Airbnb stated that it anticipates average daily rates to moderate this quarter as a result of a strong currency and a trend in travelers returning to cities, where rates are often cheaper due to smaller facilities. With the low end of that range falling below Wall Street's estimate of $1.86 billion, the business projected fourth-quarter sales of between $1.80 billion and $1.88 billion. The somber prognosis comes after Airbnb had its most successful quarter and greatest quarterly revenue during the summer. The company's third-quarter earnings of $1.2 billion above analysts' expectations as revenue increased 29% to $2.88 billion. Before the numbers were made public, Bloomberg Intelligence analysts Mandeep Singh and Damian Reimertz warned in a note that Airbnb could start competing again with hotels, which are currently seeing more inventory come back online following the pandemic downturn. $ABNB reports Q3 earnings that beat estimates, but comes in a bit low with Q4 guidance sending shares down. 👀 Q4 revenue forecast $1.80B to $1.88B vs $1.86B estimate💵 Revenue $2.88B vs $2.83B estimatehttps://t.co/RzAY1P67Ux — Yahoo Finance (@YahooFinance) November 1, 2022 ECB addressing Climate Risk After identifying numerous areas of concern, the European Central Bank increased the pressure on banks by warning them that if they don't address their financial risks related to climate change within the next two years, there will be increased capital requirements and fines. The ECB has sent letters to all of the major banks in the eurozone outlining 25 areas, on average, where it believes they are falling short in tackling climate risks and setting a deadline of 2024 to do so. The ECB announced on Wednesday that a "limited number" of banks have already had their capital requirements increased this year owing to concerns that they have not adequately addressed climate risks. This occurred in accordance with "pillar two" guidance, which, though not required, has a big impact on banks' capital management. The actions signal a substantial increase in the central bank's pressure on eurozone bankers to accelerate their efforts to identify, manage, and disclose climate risks in their balance sheets. Frank Elderson, vice-chair of the ECB's supervisory board, stated in a blog post that "the glass is slowly filling up, but it is not yet even half full." Credit Suisse just misses junk status ECB warns banks of capital hit if they fail to tackle climate risk https://t.co/ttlQoZDm1B — Finance News (@ftfinancenews) November 2, 2022 S&P Global Ratings reduced Credit Suisse Group AG's long-term rating to only one notch above junk status, highlighting the bank's difficulties following the announcement of a dramatic restructuring plan last week. The long-term rating of the Swiss bank was downgraded from BBB to BBB- with a stable outlook. Just one notch separates that from the BB "speculative grade." Following the restructuring's announcement on Thursday, the US ratings agency echoed a number of experts by stating that it saw "significant execution risks amid a deteriorating and uncertain economic and financial environment." Additionally, it indicated that many aspects of asset sales are still "unclear." As investors assessed the hefty costs of the plan, the low return expectations, and the massive dilution, Credit Suisse's new strategy led to the day's worst single-day decrease in share price ever, with shares falling 18%. The bank announced the strategic review as it reported a quarterly loss of 4.03 billion Swiss francs, which included a substantial impairment of deferred tax assets connected to the redesign. The restructure will result in the dissolution of the investment bank and will cost roughly $2.9 billion through 2024. S&P downgrades Credit Suisse Group, Moody's cuts some ratings https://t.co/n12QMnXBx5 pic.twitter.com/ASCCZSV3cg — Reuters (@Reuters) November 2, 2022 Sources: finance.yahoo.com, twitter.com, ft.com, reuters.com
CVs Health and Walgreens Are The Most Recent In The Line Of Settlements Concerning The Opioid Problem

CVs Health and Walgreens Are The Most Recent In The Line Of Settlements Concerning The Opioid Problem

Rebecca Duthie Rebecca Duthie 02.11.2022 16:35
Summary: CVS Health and Walgreens, have agreed to pay roughly $10 billion. These are the first agreements made by pharmacy chains related to their involvement in the US opioid crisis. CVs Health and Walgreens settle opioid lawsuits The two largest US drugstore chains, CVS Health and Walgreens, have agreed to pay roughly $10 billion to resolve the majority of the ongoing legal disputes relating to the prescription of potent opioid medicines. These are the first agreements made by pharmacy chains related to their involvement in the US opioid crisis, which has resulted in tens of thousands of fatalities in recent years. “The agreement would fully resolve claims dating back a decade or more and is not an admission of any liability or wrongdoing,” the company added, as it released third-quarter results. “CVS Health will continue to defend against any litigation that the final agreement does not resolve.” With payments totaling around $4.79 billion over 15 years, Walgreens announced that it has achieved an agreement in principle to defend against the "vast majority" of opioid lawsuits brought against it by states. Under the deal, it anticipates paying native American tribes an additional $154 million. According to Walgreens, the agreements did not include the firm admitting any wrongdoing or guilt. According to a Tuesday Bloomberg News article, a $12 billion opioid settlement agreement had been reached between CVS, Walmart, and Walgreens. The in-principle agreements reached with CVS and Walgreens "are an important step in our efforts to hold pharmacy defendants accountable for their role in the opioid epidemic," according to the negotiating team in the National Prescription Opiate Litigation, a group of senior attorneys who have been working on the opioid lawsuits. The settlements with CVS and Walgreens are the most recent in a line of settlements concerning the opioid problem. CVs Price Chart Sources: ft.com, finance.yahoo.com
Solid Wage Growth in Poland Signals Improving Labor Market Conditions

BoE Hikes Interest Rates 75bps, ECB Feeling Post-fed Interest Rate Hike Repercussions, Fed Hikes Interest Rates 75bps

Rebecca Duthie Rebecca Duthie 03.11.2022 15:49
Summary: The Bank of England increased interest rates by 0.75 percentage points to 3%. The Fed, which has an impact on international markets, must be monitored by the ECB. Jay Powell forewarned that US interest rates may rise higher than anticipated. BoE interest rate hikes The Bank of England increased interest rates by 0.75 percentage points to 3% in order to combat inflation in a way that hasn't been attempted in the past 30 years. The central bank offered unusually strong guidance that interest rates wouldn't need to rise much higher to bring inflation back to its objective of 2%, despite predicting a "particularly tough outlook" with a protracted recession ahead. The Monetary Policy Committee of the Bank of England stated that market estimates for an interest rate peak of 5.25 percent were excessively high. According to the statement, the majority of the committee thought that "additional hikes" could be necessary "for a durable return of inflation to goal, albeit to a peak lower than priced into financial markets." BoE’s latest interest rate hike was was aggressive The BoE's decision followed a similar move by the European Central Bank last week and a 0.75 percentage point increase by the US Federal Reserve on Wednesday. The official interest rate in the UK reached its highest point since late 2008 after being raised to 3%. Aside from a sharply reversible jump on September 16, 1992, often known as "Black Wednesday," it is the biggest increase since 1989. A bigger rise at the meeting "would help to bring inflation back to the 2% target sustainably in the medium term, and to minimise the risks of a more lengthy and costly tightening later," according to the meeting minutes, which were approved by seven of the nine MPC members. ⚠️BREAKING:*BANK OF ENGLAND RAISES KEY INTEREST RATE BY 75BPS TO 3.00%, LARGEST RATE HIKE SINCE 1989🇬🇧🇬🇧 pic.twitter.com/A3rx8jpeLz — Investing.com (@Investingcom) November 3, 2022 ECB facing repercussions from aggressive Fed The U.S. Federal Reserve, which has an impact on international markets, must be monitored by the European Central Bank, but it cannot simply copy its policy decisions, according to ECB President Christine Lagarde on Thursday, following the Fed's guidance for even higher interest rates. On Wednesday, the Fed increased its benchmark rate by another 75 basis points. Fed chair Jerome Powell also stated that borrowing costs would need to increase "higher than previously projected" in order to combat inflation, which caused investors to price in additional ECB rate increases as well. But Lagarde argued that because economic conditions in the 19-country euro zone were different from those in the United States (and the ECB itself raised rates by 75 basis points last week), the ECB could not simply mimic the Fed. This point was also made by ECB board member Fabio Panetta and Bank of Italy governor Ignazio Visco. Lagarde acknowledges ECB was affected by the Fed’s actions Lagarde acknowledged that the ECB was "affected by the repercussions" of Fed action on the financial markets, particularly the decline in the value of the euro relative to the dollar on Thursday. Lagarde reiterated her commitment to bringing inflation down to the ECB's 2% objective by stating that "clearly the exchange rate matters and has to be taken into account in our inflation projections." According to ECB data released on Thursday, the interest rate that banks seek from businesses increased by 55 basis points in September, the largest monthly increase since the creation of the euro, to stand at 2.41%. Since 2015, this was the highest. *ECB PRESIDENT LAGARDE: A RECESSION WON'T BE SUFFICIENT TO SETTLE INFLATION🇪🇺🇩🇪🇫🇷🇮🇹🇪🇸🇳🇱 pic.twitter.com/zcfEzCi1ZB — Investing.com (@Investingcom) November 3, 2022 Fed may slow down their interest rate hiking cyc;e Jay Powell forewarned that US interest rates may rise higher than anticipated, but he also left open the prospect that the Federal Reserve might slow down its drive to tighten monetary policy. Speaking after the central bank raised its benchmark interest rate by 0.75 percentage points for the fourth time in a row, Powell cautioned that there was still work to be done in bringing down inflation and cited a number of economic indicators to support his claim. Powell did, however, provide a suggestion that policymakers would be open to adopting a less drastic rise at the Fed's upcoming meeting in December. The following meeting or the one after that may mark the beginning of that period. Powell made a crucial point when he noted that before transitioning to lesser hikes, the Fed did not need to wait for several months of lower inflation data. ⚠️BREAKING:*FED CHAIR POWELL SAYS TIME TO SLOW RATE HIKES MAY COME 'AS SOON AS NEXT MEETING'$DIA $SPY $QQQ 🇺🇸 🇺🇸 — Investing.com (@Investingcom) November 2, 2022 Sources: twitter.com, investing.com, ft.com
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

US Unemployment Rate Increased To 3.7%, UK Private Wealth Portfolios, PBoC Trying To Gain Access To Top Internet Companies Data

Rebecca Duthie Rebecca Duthie 04.11.2022 14:54
Summary: In the biggest economy in the world, the jobless rate rose from 3.5% to 3.7% last month. The real worth of UK private wealth portfolios decreased by up to one-third. Beijing is working to tighten its control over the nation's digital sector. US Unemployment rate rises In October, the U.S. economy created 261,000 new jobs, according to Bureau of Labor Statistics data. The carefully watched reading from last Friday was lower than the upwardly revised amount of 315,000 in September but still higher above economists' projections of 200,000. In the biggest economy in the world, the jobless rate rose from 3.5% to 3.7% last month. The number was expected to increase to 3.6%, according to economists. However, a jump in the unemployment rate to 3.7% signaled some easing in labor market conditions, which would allow the Federal Reserve to tilt towards smaller interest rate hikes beginning in December. In October, U.S. firms employed more workers than anticipated. 200,000 jobs were predicted by economists surveyed by Reuters, with estimates ranging from 120,000 to 300,000. After rising 5.0% in September due to the removal of previous year's significant increases from the computation, wages climbed by 4.7% annually in October. Additionally, other pay metrics have cooled off, which is positive for inflation. The Fed impact on Unemployment The Fed announced a fresh 75 basis point increase in interest rates on Wednesday and warned that future increases in borrowing costs will be necessary to combat inflation, but it also hinted that it may be nearing the end of the sharpest tightening of monetary policy in 40 years. Because businesses have been replacing workers who would have gone, job growth has remained strong despite a decline in domestic demand and an increase in borrowing prices. However, with recession threats rising, this practice may soon come to an end. According to a poll released by the Institute for Supply Management on Thursday, some businesses in the services sector "are delaying backfilling available positions" because of the unstable economic climate. ⚠️BREAKING:*U.S. UNEMPLOYMENT RATE RISES TO 3.7% AS ECONOMY ADDS 261,000 JOBS IN OCTOBER 🇺🇸 🇺🇸 pic.twitter.com/Z0fiqgAI5X — Investing.com (@Investingcom) November 4, 2022 UK Private wealth portfolios under pressure In the first nine months of this year, the real worth of UK private wealth portfolios decreased by up to one-third on average as people's purchasing power was hammered by a combination of investment losses, inflation, and a weak pound. According to research by Asset Risk Consultants (ARC), which examined the performance of strategies employed by more than 100 significant UK wealth managers, UK wealth management portfolios lost about 10% on average in the year ending in September, but price increases and the decline in the value of the pound against the US dollar increased the losses. The numbers demonstrate that for UK investors this year, inflation and currency fluctuations have destroyed much more real value than the concrete losses on investment portfolios. Investors, according to Harrison, frequently think of their wealth in terms of a fixed amount and fail to mentally adapt when the purchasing power of their assets changes. The sector responsible for managing the wealth of wealthy families is predicated on the principle of protecting money, therefore the losses will cause wealth managers and their customers to have difficult conversations. UK private wealth portfolios down by up to a third https://t.co/TnUgAX5XGA — Finance News (@ftfinancenews) November 4, 2022 PBoC trying to control digital sector The Chinese central bank is having trouble persuading more than a dozen top internet companies to meet a deadline in December for sharing user data with state-backed credit-scoring firms. Beijing is working to tighten its control over the nation's digital sector and consumer financing, which is why there is a dispute over who should govern access to the internet companies' enormous troves of user data. According to insiders briefed on the negotiations, the People's Bank of China asked Tencent, Meituan, and other significant platforms to provide user data with two state-backed businesses, Baihang and Pudao, by the beginning of next month. This data includes everything from shopping records to travel histories. PBoC struggles to impose personal data regime on China’s tech groups https://t.co/Olv9Tl3iMK — Finance News (@ftfinancenews) November 4, 2022 Sources: ft.com, investing.com, twitter.com
Apple Stock Price, Microsoft, Amazon And Tesla (TSLA) Added A Lot Since July! How Deep Could EUR/USD Drop?

Telsa (TSLA) stock price has tanked 12% since Musk took control of Twitter (TWTR) on October 27

Rebecca Duthie Rebecca Duthie 08.11.2022 18:59
Summary: Twitter does not make money like Tesla. The serial entrepreneur made an effort to reassure Tesla's supporters and investors . Investor confidence in Musk is lacking The maker of high-end electric vehicles appears to be going through a similar experience to that of an orphaned kid or a beloved who has fallen from grace. Elon Musk, the company's dynamic and forward-thinking co-founder and CEO, appears to have lost interest in it. Put the blame on Twitter (TWTR), which needs a lot of attention due to its enormous influence on public and political life. While Twitter does not make money like Tesla, it is nonetheless seen as our generation's equivalent of the town square, where trend-setters and opinion leaders congregate. Twitter sets the daily political agenda and the conversational subjects that eventually predominate in mainstream media coverage. Responsibility also comes with this authority. You are responsible for the content management policy, which requires constant vigilance. Any error in the content that is put on the platform has the potential to spark controversy, which can be difficult and time-consuming to resolve. Musk paid too much for Twitter—$44 billion. As part of the leveraged buyout, the billionaire owes around $13 billion in debt, which is secured by his remaining Tesla stock. He has been looking for ways to make money for the social network since he took control on October 27. But as Musk becomes more active on Twitter, Tesla's stock price declines. At the Baron Investment Conference on November 4, the billionaire claimed that since he bought Twitter, his workload had increased from "78 hours a week to perhaps 120." The serial entrepreneur made an effort to reassure Tesla's supporters and investors by claiming that he was still actively involved in the company's management. The message didn't reassure anyone. Since that time, Wall Street has seen a continuous decline in the price of Tesla stock. Tesla shares dropped to $196.66 at the close of trade on November 7—their lowest price in 52 weeks. Since Musk sealed the Twitter agreement on October 27, Tesla stock has fallen 12.4%. Tesla shares have lost a total of 41.2% of their value, or $197.08, since Musk revealed his offer on April 25. This results in a market value decline of about $436 billion. The holding company of renowned investor Warren Buffett, Berkshire Hathaway (BRK.A), surpassed Tesla on November 7 to become the sixth-largest corporation in the world by market capitalization. TSLA Price Chart Sources: finance.yahoo.com, thestreet.com
The US Dollar Index Is Producing A Reasonable Bullish Divergence

US core and headline inflation data missed market expectations in both the YoY and MoM figures

Rebecca Duthie Rebecca Duthie 10.11.2022 14:42
Summary: The CPI inflation data missed market expectations for October. Initial market reaction in the wake of the release of the data. US CPI data missed market expectations Since the Dollar is struggling to maintain rallies, a significant positive surprise from Thursday's inflation data is necessary for the bulls to retake the lead. Markets anticipated an increase of 0.6% month-over-month for October, bringing the year-over-year gain to 8.0%, slightly less than September's 8.2%, when the U.S. inflation data was revealed at 13:30 GMT. It is anticipated that the crucial core inflation number would come in at 0.5% month over month and 6.5% year over year.   Because the actual number did not match the estimates for both the headline and core inflation rates which are the Fed's preferred measure—however, excludes food and energy—were expected to be lower but still high. Anything above 8% and 6.5%, however, might reverse the recent USD slump and keep the Fed on the hawkish side of things. Since the FOMC meeting last week, the peak rates for the Fed in 2023 have decreased, moving from 5.1% to a level closer to 5%. US CPI inflation MoM came in at 0.3%, missing market expectations and the YoY figure came in at 6.3%, also missing market expectations. This could mean that the halt in the US dollar rally may extend further. The markets reaction to the release of the CPI data The mechanics for the Dollar are straightforward: a beat would have been consistent with a rise as investors are compelled to plan for future interest rate increases from the U.S. Federal Reserve. A negative surprise was expected given the weaker dollar and the idea that "peak rates" have finally been reached. The size of the variance is crucial since it determines how responsive currency markets are. The initial market reaction saw the EUR/USD currency pair strengthened as well as with the GBP/USD pair, S&P 500 dropped and the USD/JPY weakened in the wake of the release of this data. Sources: finance.yahoo.com, poundsterlinglive.com, dailyfx.com
Binance Academy: Coin Burn - What Is It?

FTX crash causing its auditors to come into question

Rebecca Duthie Rebecca Duthie 14.11.2022 17:45
Summary: FTX had its 2021 financial reports audited. A run on customer deposits began the downfall of FTX. The downfall of the FTX crypto Two US accounting companies that the cryptocurrency exchange claimed it had hired to examine its books have come under scrutiny as a result of FTX's demise. FTX asserted that Armanino, one of the 20 largest accounting companies in the nation by sales, and Prager Metis, which bills itself as the first accounting company to open a headquarters in the metaverse, had audited its 2021 financial reports. Even though the accounting regulations for digital assets are frequently ambiguous and businesses are still in their infancy, the two firms are among many in the US that have professed expertise in digital assets in a bid to seek business from the rising number of crypto enterprises. Sam Bankman-Fried, the founder of FTX, hailed the audit of the company's financial results as a turning point last year, but neither the accounts nor the auditors' names were made public until the day before FTX filed for bankruptcy on Friday. When Forbes magazine was putting together a ranking of cryptocurrency exchanges earlier this year, the publication claimed that FTX gave it "a trove of information on its operations, including most of the companies it did business with, when its last audits were, and details on its regulatory licenses." (FTX eventually came in sixth.) FTX accounting firm is in the spotlight Both accounting firms declined to comment on the extent of their work for FTX or the time since they last provided an audit opinion. A run on customer deposits at its international exchange that followed revelations about the exchange's complex connections to other parts of Bankman-crypto Fried's enterprise brought down FTX. According to those acquainted with the company's finances, his trading outfit Alameda Research owing FTX $10 billion this week. FTX token price chart Sources: finance.yahoo.com, ft.com
Apple May Surprise Investors. Analysts Advise Caution

European chipmakers seek stability in the wake of new US export restrictions

Rebecca Duthie Rebecca Duthie 15.11.2022 19:13
Summary: European chipmakers said they are looking for stability for their operations. Washington's export restrictions hinder operations of global supply chains. Chipmakers seeking stability Leading European chipmakers said they are looking for stability for their operations in China as Washington's export restrictions hinder operations of global supply chains. STMicroelectronics, Infineon, and NXP Semiconductors' chief executives stated on Monday that while they are in compliance with Washington's export restrictions against China's semiconductor industry, they do not have any plans to stop doing business in the Asian nation, which has the second-largest economy in the world. One of the largest semiconductor trade fairs in Europe, Electronica in Munich, hosted the CEO Roundtable special event where the remarks were made. Early in October, the US Department of Commerce began a fresh wave of export control measures to limit China's capacity to develop cutting-edge computer and artificial intelligence technology by limiting access to US technologies. As their products for the Chinese market are more about mature chip production technology than the advanced ones targeted by Washington, European companies who supply tools used in chip production, like ASML, and European chipmakers are less affected by the new laws than American companies. Geopolitical unrest for European chipmakers However, European chip companies are concerned that the geopolitical unrest brought on by the escalating hostilities between Washington and Beijing will stymie their business activities in China. The Joe Biden administration reportedly tried to establish a trilateral deal with Japan and the Netherlands on Sunday, according to the Financial Times, in order to make it more challenging for China to produce cutting-edge semiconductors for military applications. Despite the fact that the new regulations have no impact on NXP's operations in China, Sievers said the company has advised its US-based employees to stop communicating with clients who are engaged in the semiconductor manufacturing industry in China since the regulations went into effect last month. Sources: ft.com
Musk testified in Delaware court on Wednesday claiming he had little say in the Tesla payout that helped him become the world's richest man

Musk testified in Delaware court on Wednesday claiming he had little say in the Tesla payout that helped him become the world's richest man

Rebecca Duthie Rebecca Duthie 16.11.2022 18:54
Summary: Elon Musk testified that he was not involved in the pay negotiations. Shareholders claim the board is made up of Musks ‘pals’. Musk testified on Wednesday On Wednesday, Elon Musk testified that he was not involved in the negotiations among Tesla board members about a 2018 compensation plan that gave him billions in stock options and helped him become the richest person in the world. Speaking in a Wilmington, Delaware courtroom, Mr. Musk rebutted claims made in a shareholder complaint that the board of the electric car company was comprised primarily of his pals and other close associates who carried out his orders. In the lawsuit in which Mr. Musk is testifying, the focus is on a compensation package that provided Mr. Musk stock options that allowed him the ability to purchase nearly $50 billion worth of Tesla shares if the firm fulfilled specific sales, profit, and share price gain benchmarks. The agreement was one of the biggest of its kind at the time, and many other business boards have used it as a model to reward top executives. Attorneys for the shareholder Richard Tornetta, who filed the lawsuit, claim in court filings that Mr. Musk began discussing his remuneration package with Ira Ehrenpreis, the director who oversaw the board's compensation committee, in April 2017. Additionally, the plaintiff's attorneys claimed in court documents that Tesla directors and executives testified that the board did not anticipate Mr. Musk leaving the organization and had not started to find suitable successors to him. The company's shares started rising substantially more than a year after the 2018 Tesla compensation agreement was implemented, increasing from about $21 to a record of about $410 in November 2021. Since then, it has decreased by roughly 50% and currently costs around $190. Chancellor Kathaleen McCormick of the Delaware Court of Chancery is hearing the issue. She also ruled over the brief legal action Twitter brought against Mr. Musk in July to compel him to complete the acquisition of the social media giant after he attempted to back out of the transaction. Last month, Mr. Musk closed the transaction. TSLA price chart SourceS: finance.yahoo.com, nytimes.com
UK PMIs Signal Economic Deceleration, Pound Edges Lower

NVIDIA (NVDA) Q3 earnings results outperformed part of the markets forecasts

Rebecca Duthie Rebecca Duthie 17.11.2022 17:59
Summary: Revenue surpassed analysts' projections, earnings per share lagged behind. Nivida’s Q4 revenue estimates fell short of investor expectations. NVIDIA Q3 earnings The industry leader in graphics chips, Nvidia (NVDA), released its Q3 earnings results after the market closed on Wednesday. While revenue surpassed analysts' projections, earnings per share lagged behind. According to data provided by Bloomberg, the company outperformed Wall Street forecasts in the following areas: revenue ($5.93 billion vs. $5.79 billion projected). EPS after adjustments: $0.58 vs. $0.70 anticipated. Gaming income was $1.57 billion as opposed to the predicted $1.32 billion. Revenue from data centers: $3.83 billion versus $3.7 billion anticipated. With a $6 billion forecast, Nvidia's Q4 sales fell just shy of Wall Street estimates. Analysts anticipated $6.09 billion. Shares of Nvidia increased by about 2% after the revelation. In the quarter, income from data centers increased by about 31% year over year, but revenue from gaming fell by 51%. As consumer and commercial demand for electronics has decreased following the enormous rise the sector experienced during the epidemic, chip stocks have taken a beating this year. After stocking up during shutdowns, consumers don't need as many computers, and businesses already have plenty of equipment for their remote and hybrid workers. The future of NVIDIA Nvidia reduced chip manufacturing in Q2 while CEO Jensen Huang informed investors that the business was attempting to better match inventory to chip demand. During the pandemic, Nvidia's graphics chips were in such great demand that they were fetching hundreds of dollars more than their retail costs. However, as people resumed their pre-pandemic lifestyles, demand for chips decreased and prices returned to normal. Nvidia is also making efforts to maintain its ability to sell its premium goods in China. As a substitute for the A100 chip, which the U.S. government claimed was too potent to be shipped to China, Nvidia started selling its new A800 processor there during Q3 of this year. The administration is concerned that China will employ the technology for military purposes. NVDA Price Chart Sources: finance.yahoo.com
The Special Edition Of The Saxo Market Call Podcast: The Wild Year Of 2022 For Commodities And What May Be In Store In 2023

Oil bounces off a 10-month low on OPEC not considering increasing oil output

Rebecca Duthie Rebecca Duthie 21.11.2022 18:58
Summary: Oil prices rose from a 10-month low on Monday. G7 countries are planning to cap the price of Russian crude. OPEC are not planning an increase in oil output After Saudi Arabia "categorically" dismissed a report that Opec was considering an increase in output to help offset the loss of Russian supply, oil prices rose from a 10-month low on Monday. The international standard for crude oil, Brent, initially fell 6% to $82.79 per barrel before reducing its loss to 2% and trading at $85.95. The US benchmark, West Texas Intermediate, fell by a similar amount but later pared its losses to trade down about 2% at $78.50. Each benchmark's price fell to its lowest intraday level since January as a result. This was before Russia's invasion of Ukraine upended the world's crude markets and caused prices to skyrocket. After the Wall Street Journal revealed that Saudi Arabia and other Opec producers were debating increasing output by up to 500,000 barrels per day at the group's meeting in Vienna on December 4, the market became volatile. The cartel's de facto leader, Saudi Arabia, later claimed that it was "well known" that no decisions were discussed before meetings. Additionally, it would occur the day before the EU is scheduled to impose an embargo on oil exports from Russia and the G7 countries are planning to cap the price of Russian crude. The US dollar index, which compares the US dollar to six other currencies, increased 1% on Monday, continuing the comeback from the previous week, even though the US dollar is still down roughly 3% for the month of November. The lower-than-expected US inflation number for October and expectations that China might be about to loosen its zero-Covid stance had fueled speculation that the dollar may have peaked in late September. This week, however, investors had less confidence in the latter after the provincial capitals of Shijiazhuang and Guangzhou implemented stricter Covid controls to reduce cases. Sources: ft.com
Dr. Copper: Building a Foundation Amidst Commodity Challenges

Elon Musk net worth has dropped by 37% in 2022

Rebecca Duthie Rebecca Duthie 22.11.2022 19:46
Summary: Musk hasn't been the same since he lost his position at the $200 billion club. Tesla shares are being weighed down by Musk’s twitter takeover. Musk’s fortune is declining with Teslas share value He was the only member for more than ten months of the world's most exclusive financial club, which has never had more than two members present at once. Up until a few weeks ago, the CEO of Tesla - Get Free Report and owner of the microblogging website Twitter had been a frequent visitor there. The $200 billion club that is. Musk hasn't been the same since he lost his position there. If the eccentric visionary is still the richest man in the world, his money has been declining. According to the Bloomberg Billionaires Index, Musk possessed a fortune of $170 billion as of Nov. 21. But this year, his net worth dropped by $101 billion, or 37%. Since Musk announced his takeover attempt on April 25, Tesla shares have dropped nearly 50% to $167.87, resulting in a $525 billion decline in market capitalization. Tesla shares have fallen 25% after the billionaire closed the Twitter transaction on October 27, representing a loss in market value of $180 billion in less than a month. The price of Tesla shares is down 52.4% overall for the year. Since Musk took on $13 billion in personal debt to fund the acquisition, his early moves at Twitter produced confusion, which made it even harder for him to turn the site profitable as soon as possible. He implemented waves of layoffs, issued a deadline to workers, and reactivated the account of former President Donald Trump, who had been blocked by the social network following the events of January 6, 2021 on Capitol Hill. Two-thirds of the staff, or 5,000 workers, left as a result of all this. The seasoned businessman recently said that since gaining control of Twitter, he had little time to sleep. The ongoing decrease in Tesla stock, which accounts for a sizable portion of Musk's wealth, is hurting him. Sources: finance.yahoo.com, thestreet.com
TEST

Wealthy clients are withdrawing assets from Credit Suisse accounts

Rebecca Duthie Rebecca Duthie 23.11.2022 18:48
Summary: Wealthy clients have withdrawn up to 10% of their assets from Credit Suisse. The bank has been using liquidity buffers. Credit Suisse stocks are suffering. Credit suisse stock price is taking a dive Since the beginning of October, wealthy clients have withdrawn up to 10% of their assets, according to the troubled Swiss bank Credit Suisse, which has estimated a pre-tax loss of up to SFr1.5 billion ($1.6 billion) for the fourth quarter. The bank stated in its fourth profit warning since January that the size of the client outflows, which came after a series of social media rumors about its financial health, had caused the bank to use up liquidity buffers at the group and legal entity level. According to Credit Suisse, it "fell short of some legal entity-level regulatory criteria." According to the statement, the wealth management division has experienced outflows totaling roughly SFr63.5 billion, or 10% of the assets under management at the end of the third quarter. The bank lost about SFr84 billion ($89 billion) in assets across the board as clients in wealth management, asset management, and retail banking switched their cash holdings, investments, and deposits to rivals. According to the statement, the wealth management division has experienced withdrawals totaling roughly SFr63.5 billion, or 10% of the assets under control at the end of the third quarter. The bank also reaffirmed its capital ratio guideline from last month, which aimed for a common equity tier one ratio of more than 13.5% by 2025 and at least 13% from 2023 to 2025 as a measure of financial stability. It did, however, show that since the end of September, the liquidity capital ratio, which measures a company's capacity to absorb short-term stress, had dropped from 192% to a daily average of 140%. Regulators mandate that the bank maintain a percentage above 100%. CS Price Chart Sources: finance.yahoo.com, ft.com
Euro eyes Services PMIs

Twitter’s closure of Brussels headquarters raises concerns

Rebecca Duthie Rebecca Duthie 24.11.2022 15:52
Summary: Elon Musk shut down Twitter's entire Brussels headquarters. Concerns about whether twitter has the manpower to ensure adherence to local legislation. Twitter sparking online safety issues After a disagreement over how the social network's content should be regulated in the Union, Elon Musk shut down Twitter's entire Brussels headquarters. According to the Financial Times, Julia Mozer and Dario La Nasa, who were in charge of Twitter's digital policy in Europe, left the business last week. The executives were instrumental in getting the business to abide by the landmark EU Digital Services Act, which went into effect last week and established new guidelines for Big Tech companies to protect users' privacy online. At the beginning of the month, other executives had already left the tiny Brussels headquarters after Elon Musk cut the number of employees in the company in half, from 7,500 to about 3,750, in the weeks following his £38 billion takeover. The CEO of Tesla and SpaceX tweeted that "the bird is liberated" after completing his platform acquisition. Thierry Breton, a European commissioner, curtly reminded everyone of the EU's content-moderation standards shortly after that and said, "In Europe, the bird will fly by our rules." As he began a hiring push, Mr. Musk had previously stated that Twitter's recent round of layoffs would end this week. Twitter’s global legislation The departures from Brussels are indicative of a global trend that started in India and moved to France, where regional Twitter executives who held important positions dealing with government officials suddenly left the company in recent weeks as a result of sweeping layoffs. This has raised concerns about whether the business has the manpower to ensure adherence to local legislation intended to monitor internet material, raising the possibility of legal action and regulatory action against the business. Data showing a 5% annual decline in hate speech removals from Twitter was released by the European Commission on Thursday. These problems come as Musk's attempts to overhaul Twitter's operations have encountered difficulties, particularly with regard to the user identity verification process. Sources: finance.yahoo.com, ft.com
EUR/USD Faces Ongoing Decline Amid Budget and Market Turbulence

Meta fined by Irish regulators amidst privacy concerns

Rebecca Duthie Rebecca Duthie 28.11.2022 19:04
Summary: Meta has frequently been the target of privacy regulators around the world. Irish privacy authorities announced a fine for Meta. Meta fined by Ireland’s privacy authority Ireland's privacy authority has fined Meta, the parent company of Facebook and Instagram, €265 million for its treatment of user data, bringing the total amount the technology giant has been fined by European regulators to close to €1 billion. The Irish Data Protection Commission's announcement of the fine on Monday brings to a close an investigation that began in April of last year after information about more than 500 million Facebook and Instagram users was posted online. Since the company's European headquarters are located in Dublin, Ireland's data watchdog frequently leads the charge in Europe. Meta has frequently been the target of privacy regulators around the world. The most recent punishment is a further setback for Meta, which earlier this month let go more than 11,000 employees as it restructured its operations in response to a decrease in revenues and intense competition from rivals like TikTok. From $10.39 billion the year before, Meta's net income decreased to $6.69 billion. The Irish fine is related to a feature that allows users to import contacts from their phones into the Facebook or Instagram app in order to find friends and acquaintances. 2019 saw the publication on a hacking forum of the personal information of 533 million people from 106 different countries, including names, addresses, and some email addresses. The vulnerability on this feature, where data could be gathered by outside parties through a procedure called scraping, was later fixed by Facebook. Companies who violate the bloc's privacy laws risk fines of up to 4% of their global revenue. Other countries have pursued privacy violations as well. The largest ever fine for violating the EU's GDPR regulations was levied against Amazon last year by Luxembourg, who fined the company €746 million for violating data privacy laws. Meta Price Chart Sources: finance.yahoo.com, ft.com
Sunrun's Path to Recovery: Analysts Place Bets on High Growth Amidst Renewable Energy Challenges

HSBC to sell its Canadian operations for $10 billion to the Royal Bank of Canada

Rebecca Duthie Rebecca Duthie 29.11.2022 19:28
Summary: HSBC has agreed to sell its Canadian operations to RBC. HSBC’s share price increased on Tuesday. RBC's acquisition represents the country's first significant domestic transaction in ten years. HSBC to sell its canadian operations to RBC As the lender curtails its global network outside of Asia in response to demands from its largest investor to separate, HSBC has agreed to sell its Canadian operations to Royal Bank of Canada for $10 billion. On hearing about the purchase, HSBC's shares increased by over 5%. The bank also indicated that it would return some of the proceeds to investors. With the acquisition, RBC gained 130 locations and more than 780,000 retail and business clients. If authorities accept the merger, RBC, who is now Canada's largest lender by assets, would strengthen its position. The biggest stakeholder at HSBC, the Chinese insurer Ping An, has been exerting consistent pressure on Quinn and chair Mark Tucker to separate the bank's Asian and western operations. In an era of hostile US-China geopolitics, Ping An has criticized the bank for years of subpar performance, chronically high costs, and a declining share price, arguing that the bank can no longer efficiently operate by straddling east and west. The sale in Canada comes after comparable divestitures of unprofitable consumer businesses in France and the US. When HSBC sold its French retail network to Cerberus for €1 last year, it suffered a $3 billion loss. The business was Canada's sixth-largest bank with assets of CAD134 billion, and RBC's acquisition of it represents the country's first significant domestic transaction in ten years. Most lenders have chosen to expand in the US instead of Canada due to concerns about competition in that country's highly consolidated banking sector. BNP Paribas and Bank of Montreal reached an agreement last year to sell the San Francisco-based Bank of the West for $16.3 billion. HSBC Price Chart Sources: ft.com, finance.yahoo.com
The Markets Still Hope That The Fed May Consider Softer Decision

Eurozone inflation declines for the first time in 17 months indicating that a peak has been reached

Rebecca Duthie Rebecca Duthie 30.11.2022 19:09
Summary: Latest eurozone inflation reading could suggest a peak has been reached. Eurozone inflation came in at 10% for October. The ECB is expected to raise rates by 0.5 percentage points. Eurozone inflation may have reached its peak The European Central Bank (ECB) may be able to switch to smaller interest rate increases next month as a result of the eurozone's inflation declining for the first time in 17 months and suggesting that the largest price spike in a generation has peaked. According to data released by the EU's statistics agency on Wednesday, a slowdown in energy and services prices led inflation in the single currency bloc to fall more than predicted to 10% in November, down from a record 10.6% in October. Recently, there has been increased optimism that inflation in the eurozone is falling due to a decline in wholesale energy prices in Europe and the alleviation of supply chain bottlenecks. Additionally, US inflation decreased in October, and worldwide data signs point to the pinnacle of this year's raging global inflation. The ECB is expected to raise rates by 0.5 percentage points when its governing council meets on December 15 after two consecutive 0.75 point increases, according to economists, as a result of the slowing rate of inflation in the eurozone. However, price rise in the region is still above the ECB's 2% target, and some officials contend that in order to prevent a harmful wage-price spiral from taking root, rates must be rapidly raised even as inflation slows. The widely watched core inflation rate, which excludes more erratic energy and food costs to provide analysts with a clearer picture of underlying pricing pressures, remained steady at 5%. Sources: ft.com, twitter.com
Federal Reserve splits highlighted by May FOMC minutes

US labour market data deliver us with NFP print of 223K. BlackRock, JP Morgan and Citigroup to announce their earnings on Friday

Ipek Ozkardeskaya Ipek Ozkardeskaya 09.01.2023 17:28
Friday's jobs data in the US, and more specifically, the market reaction to Friday's jobs data helped stock markets to record their best boost since more than a month on Friday. However, Friday's jobs report was rather... mixed, and spurred a lot of discussions and debates regarding whether the data was soft enough to convince the Federal Reserve (Fed) officials that the inflation battle is over, or it was strong enough to make them further scratch their heads.   The NFP printed 223'000 nonfarm job additions last month versus 200'000 expected by analysts.   But the average job additions for the last three months of last year was a touch below 250'000, down from 366'000 from the prior three-month stretch, and less than half of around 540'000 jobs added each month in the first quarter of 2022.   Plus, the tech industry shed job - in line with the headlines we have been reading since months. Goldman just announce it will be cutting 3200 positions, on top of 18'000 job cuts announced by Amazon last week, among others.   So, the trend in the US jobs market is on a slowing path, even though, monthly job addition prints above 200'000 are far from numbers you expect to see in recession.   Read next: Current market gains could be partly due to people returning from holiday breaks and reentering the market, leading to increased demand and trading activity| FXMAG.COM But that's the good news. The Fed is not looking to push the US economy into recession for fun, it wants to see the jobs market tighter because, in theory, a tighter jobs market should help ease inflation.  But if inflationary pressures ease with little negative impact on jobs, that's what we call the goldilocks scenario: a soft-landing from the ultra-supportive monetary policy euphoria, easing inflation without too much pain on jobs market.  In other words, it's jackpot for the Fed!   This is why, the US markets gave such a strong positive reaction to Friday's jobs data. Both the US 2 and 10-year yields fell more than 4% after the data, pulling the US dollar index lower along with them. The S&P500 jumped around 2.30%, while Nasdaq 100 rallied near 2.80%.   Gold price boosted by lower US yields Gold reached our $1880 per ounce medium term target, boosted by lower US yields, which made the opportunity cost of holding the non-interest-bearing gold lower, and increased appetite.   But we should still not forget one thing: the US economy added around 4.5 million jobs last year- That was the second best year on record after 2021 – where 6.4 million Americans found jobs following the pandemic-shattered economy. The unemployment data hit 3.5%, a multi-decade low, and Atlanta Fed President Raphael Bostic said that the central bank still needs to keep raising the rates despite the cooler-than-expected wages data.  'Good' bad news is that the December services PMI fell to below 50, the contraction zone, in December, adding some more evidence that the US economic activity is slowing. And that's something that the Fed is happy to hear.   Activity on Fed funds futures now price in a 25bp hike at the next FOMC meeting at around 75%, but the Fed has not hesitated to disappoint markets since last year to cool down the optimism and send the stocks to turmoil. So the dovish pricing in Fed expectations make the latest gains a bit bitter-sweet, as the slightest news, or hints that the Fed would not step back from its hawkish tone could vanish the latest rally.   Read next: We are preparing to see the S&P500 decline in the first weeks of the new year down to 3600 | FXMAG.COM So, this week's US inflation data will be key in either giving the bulls a further boost or bringing back the bears with revenge.   On Tuesday, Fed Chair Jerome Powell  will speak, and he may not hesitate to abate the Fed doves on rate expectations.  On Thursday, the US CPI data will likely reveal an encouraging easing. The US CPI is expected to have eased to 6.5% in December from 7.1% printed a month earlier, and from 9.1% printed last summer. If that's the case, the rapid fall in inflation figures could further boost the Fed hawks and help stocks and bonds extend rally, and the dollar extend drop. But if we see a smaller easing in December inflation, or a figure higher than last month's, the latest gains could rapidly vanish.   Earnings season kicks off Earnings season kicks off this week, with Jefferies and Tilray due to report their latest earnings today, Bed, Bath and Beyond – which warned last week that it could go bankrupt – is due to reveal its latest results on Tuesday, while JP Morgan, Bank of America, Wells Fargo, Blackrock, Citigroup, Bank of New York and Delta Air Lines will announce their Q4 earnings on Friday.  For banks, investors will focus on the level of bad loan provisions and mortgages, as rising interest rates are good for earnings, but higher-than-expected interest rates threaten credit quality, loan growth, and net interest margins.
Taming the Dollar: Assessing Powell's Hawkish Tone Amidst BRICS Expansion

Block reported earnings per share of $0.22, according to FXStreet, primary price targets for bull will be $82.60

FXStreet News FXStreet News 24.02.2023 13:58
Block reported an EPS miss for Q4. SQ stock surged 8% to $80 in Friday's premarket. Block revenue rose 14% YoY and beat Wall Street consensus. CPE release on Friday may redirect markets. Block (SQ) stock surged 8% in Friday's premarket as the market got excited over the payments firm's mixed results. The company formerly known as Square, and still headed by Twitter founder Jack Dorsey, reported fourth quarter adjusted earnings per share (EPS) of $0.22 on revenue of $4.65 billion. Wall Street had expected adjusted EPS of $0.30 on revenue of $5.59 billion. Still shares rose as the guidance for Q1 was in line with Wall Street expectations. SQ stock may be unable to contend with the market's reaction to new inflation data on Friday however. The Personal Consumption Expenditures (PCE) index for January comes out at 8:30 AM EST and will likely trigger a broad sell-off if inflation remains above projections. Current consensus is for MoM core PCE at 0.4% and YoY core PCE at 4.3%. Likewise, if inflation comes in lower than expected, then expect SQ to retain its heights in the premarket and possibly even trader higher. Block stock news: Subscription business steals spotlight The high point of the earnings release, and likely the reason for the spike in Block stock, was the subscription segment. Services and subscription revenue came in at $1.31 billion, up nearly 70% over the previous year's period. Gross profit for that segment arrived at $1.07 billion. Block saw gross payment volumes of $53.16 billion, which climbed 15% YoY. Transaction revenue of $1.47 billion grew 13% YoY. Cash App produced $2.86 billion in revenue – 12% higher than a year ago. Much of that revenue came from sales of Bitcoin however. Cash App's gross profit of $848 million was much higher than the $518 million seen the year ago period. Read next: The BoJ is hoping that the government’s massive stimulus package will help bring down inflation| FXMAG.COM "There are three principles guiding our investment framework," said Chairman and President Jack Dorsey. "Number one, ensure our investments are focused on customer retention and growth; number two, account for ongoing cost of the business, including stock-based compensation; and number three, utilize industry standard conventions that are simple to communicate and to understand." Dorsey said Block would focus on keeping gross profit retention above 100% and following the Rule of 40 for adjusted operating income. The Rule of 40 in the case of Block would mean the company requires gross profit growth and adjusted operating margin taken together to sum to a figure of 40 or above. Source: App Economy Insights Block stock forecast Block stock was already up about 15% year to date, so the stock has benefited from January's rally already. This makes it tougher to see SQ shares continuing to rally all that much. Until earnings, Block stock had been in a downswing. Now the recent floor at $71.90 becomes the new support level to count on. The Moving Average Convergence Divergence (MACD) indicator still shows SQ stock in a bearish crossover, so this makes it less likely for the rally to stick. The primary price targets for bulls will be $82.60, which harkens back to a year ago in February when it worked as support. Above there the February 2 high from earlier this month at $90 will be the next barrier standing in the way. SQ daily chart
Tokyo Inflation Slows: Impact on JPY and USD/JPY

Darktrace revenue hits $259.3m, beating expectations. EBITDA reached $59.69m

Michael Hewson Michael Hewson 08.03.2023 10:07
The Darktrace share price has undergone a big fall from grace over the past 18 months, from the post-IPO optimism that saw its share briefly trade as high as 1,000p to lots of questions about the transparency of the company's accounting methods, which has seen its shares trade briefly below 200p. In August last year, the shares spiked above 500p on reports that the company was in talks with Thoma Bravo. Since it was announced that those talks had ended it's been one-way traffic lower with many questions remaining about how well the business it is doing, with short seller Quintessential Capital Management expressing scepticism earlier this year over the validity of its financial statements, while also taking an active short position. In response, Darktrace hired Ernst & Young to review its finances in an attempt to draw a line through the unwelcome speculation over its accounting practices. In January the shares fell to record lows of just below 200p after management cut the recurring revenue growth forecasts for the full fiscal year to between 29.5% and 31%, from their previous forecast of 31% to 34%. Management said they expected H1 revenue to come in at $258m, which would have been an increase of 35.2% from a year ago, while the number of customers had risen by 741 since the end of the last fiscal year to 8,178. Today's H1 numbers have seen H1 revenues beat expectations, coming in at $259.3m, while adjusted EBITDA came in at $59.69m. Read next: In crude oil, we are increasingly likely to see a year of two distinctive halves| FXMAG.COM The rate of customer growth in percentage terms does appear to be slowing, however, it is still in the mid-20%. Net profits fell to $581k from $4.15m, largely due to share-based payments and tax charges, which look set to weigh on profitability over the course of the rest of the year. On the full-year outlook, Darktrace reiterated its guidance from earlier in the year on annualised recurring revenue (ARR) and adjusted EBITDA basis, saying that January and February trading has been in line with expectations. On free cash flow, however, it has guided lower on the basis of IPO-related tax obligations on vesting agreements for its non-executive directors, lowering it to between 50-55% of adjusted EBITDA from 60-65%. This has prompted the shares to slip back despite management insisting that once this has been completed management said they expect free cash flow to revert to between 75% to 105% range.
Nasdaq 100 posted a new one year high. S&P 500 ended the day unchanged

Earnings season is underway. Economic events remain in focus too

Kenny Fisher Kenny Fisher 24.04.2023 23:52
It’s been a slow start to the week in the markets as investors have an eye on what’s to come with earnings season getting into full flow and major economic releases on the agenda. We’ve reached an interesting moment in which investors have been forced to retreat on post-SVB positioning on rate hikes, albeit not entirely, but they seem far from convinced that central banks will actually follow through and, if they do, that they will not reverse course. Credit conditions have tightened The reason for the apprehension is that early evidence suggests credit conditions have tightened in the aftermath of the mini-banking crisis but the extent to which it has happened, what the real economic consequences are, and what exactly it means for interest rates isn’t clear. And this is occurring at a time when inflation appears very stubborn but is set to fall sharply due to favourable base effects but the pace of disinflation is ultimately what, along with credit conditions, will determine how central banks respond. I feel things may look very different in a couple of months’ time but for now, we have to patiently play the waiting game. Earnings season is obviously giving us plenty of food for thought in the interim but the first day of the week isn’t typically the most thrilling and we’re seeing another example of that today. Stock markets are treading water and we may see that continue throughout the rest of the session. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc. A slow start to the week in markets but there's plenty still to come - MarketPulseMarketPulse
Past bubbles and AI. "It turns out that almost every time historically there has been a technology that has revolutionised reality, it has been over-invested in"

In today's Saxo Market Call - stocks, crude oil, gold, Bank of Japan

Saxo Bank Saxo Bank 27.04.2023 13:57
Summary:  Today we look at a bit of deja vu all over again as we saw a negative session yesterday in the US followed by a megacap - this time Meta - reporting after hours. We note that regional bank stocks continue to struggle at cycle lows. Some of the weak sentiment yesterday was on the Republicans passing their spendign bill in the House, with no one having a clue on next steps as this bill is dead-on-arrival in the Senate, much less Biden's desk. Elsewhere, crude oil dropped sharply again, while gold is sticky near 2,000. Today brings perhaps the busiest earnings report calendar of the season, while the first BoJ meeting with Governor Ueda at the helm is up tomorrow. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting. Listen to today’s podcast - slides are available via the link. Read next: This evening Japan shares March Jobless Rate. Tomorrow Exxon Mobil, Chevron and Mercedes-Benz share their earnings| FXMAG.COM Follow Saxo Market Call on your favorite podcast app: Apple Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: Regional banks continue to suffer, but Meta! | Saxo Group (home.saxo)
Summer's End: An Anxious Outlook for the Global Economy

US Dollar Faces Worst Weekly Decline Since November Amid Disinflation Concerns

Michael Hewson Michael Hewson 14.07.2023 08:26
US dollar set to post its worst weekly decline since November By Michael Hewson (Chief Market Analyst at CMC Markets UK)   If we could sum up the catalyst behind this week's market price action, it can probably be summed up in a single word, disinflation.   Starting with Chinese inflation numbers on Monday, to US CPI on Wednesday, and US PPI on Thursday, all this week's inflation numbers have pointed to one overarching theme, that of rapidly slowing prices, which has had markets pricing in the prospect that this month's Federal Reserve rate hike is likely to be the last one for a while.     Unsurprisingly this has prompted a sharp decline in global yields, a big selloff in the US dollar, as well as giving equity markets a real boost in a complete reversal from the gloom of last week, with the Nasdaq 100 and S&P500 rising to their highest levels since January 2022.     European markets have also undergone a decent rebound on the basis that the multiple rate hikes that investors had been pricing in from the ECB and the Bank of England may now not happen. That doesn't mean we won't see these central banks hike again, it's still very likely that the ECB will hike by 25bps this month and the Bank of England at the start of August. It is what comes after that which has started to become a lot less clear.     UK GDP numbers for May, were encouraging, despite showing a contraction due to the extra Bank Holiday, coming in better than forecast with the pound managing to post another daily gain, putting in its best run of gains this year, and reinforcing its position as the best performing G10 currency this year.     Yesterday's UK data also showed that the services sector performed better than expected, coming in at 0%, showing that despite the challenges currently facing the economy it has continued to hold up reasonably well. This would suggest that the Bank of England still has room to push rates up further with 25bps already priced in for August and potentially 50bps if next week's CPI doesn't show a material slowing. Judging by the current trends around global inflation the feeling is that UK inflation could start to fall rapidly by the end of Q3.     The slide in the US dollar this week has been astonishing, and with the Federal Reserve set to go into a blackout period tomorrow, ahead of its next meeting, there has been little sign that this week's data has swayed the FOMC's stance when it comes to their view that further multiple rate hikes are likely to be needed between now and the end of the year. The problem now is the market isn't buying it, with 2-year yields retreating sharply, as markets price in a goldilocks scenario of slowing prices and a resilient labour market.         Today's only economic numbers of note are US import and export prices for June, which are expected to reinforce the deflationary narrative of this week's data, with both month on month and annual numbers all expected to come in negative for the second month in succession.   We'll also be getting the latest University of Michigan sentiment numbers for July, which have up until recently been market movers when it comes to forward inflation expectations. After this week's CPI and PPI numbers they probably won't get the same level of attention.   On the earnings front the focus will be on the release of the Q2 numbers for JPMorgan Chase, Citigroup and Wells Fargo, and their respective views of the health of the US consumer, and how much they set plan to aside in additional provisions. Their guidance on how they see the US economy in Q3 is also likely to be crucial.     EUR/USD – surged through this year's previous peaks, and rising to its highest level since February 2022, the euro looks on course to test the 1.1500 area and the 2022 highs. The 1.1100 area should now act as support.     GBP/USD – having broken above the 1.3020 area, the pound should now head towards the 1.3300 area and March 2022 highs. Support remains a long way back at the 1.3020 area, and below that at 1.2850.        EUR/GBP – failed at the 0.8570/80 area yesterday as it continues to ping between this area of resistance and the lows this week at 0.8500/10.     USD/JPY – looks set to push lower as we move into the cloud support area with next support at the 200-day SMA at 137.20, and below that at 135.70. Resistance now comes in at the 140.20 area and 50-day SMA.     FTSE100 is expected to open 12 points lower at 7,428     DAX is expected to open 15 points lower at 16,126     CAC40 is expected to open 7 points lower at 7,362  
The Japanese Yen Retreats as USD/JPY Gains Momentum

Stock Rally Driven by Soft Inflation and Strong Earnings

Ipek Ozkardeskaya Ipek Ozkardeskaya 14.07.2023 08:30
Soft inflation, strong earnings fuel stock rally  We are having a great week in terms of US inflation news. After Wednesday's data showed that the US headline inflation slowed to 3%, and core inflation fell to 4.8% - both lower than what analysts had penciled in, yesterday's producer price inflation data also came in lower than expected. The monthly PPI eased to 0.1%, perhaps the last positive figure we see before sinking into negative territory in the coming months, and core PPI fell to 2.6%. One more good news, some underlying details in the PPI report, including health care and hotel accommodations, are used to compute the Fed's favourite PCE Price Index that will be released in the coming weeks – which could also benefit from softening inflation trend.    As a result, the US 2-year yield fell another 15bp yesterday and hit 4.60%, while the 10-year yield retreated below 3.80%. The US dollar index slipped below the 100 mark. This is the first time the US dollar index has traded below this level since April 2022, as the Federal Reserve (Fed) is not seen getting more aggressive than this when inflation is slowing. Plus, one of the most aggressively hawkish Fed members, James Bullard, resigned yesterday. The probability of another 25bp hike at the Fed's July meeting didn't change much. It's still given more than 90% probability. But the chances of another rate hike following the June hike are getting blurrier, so equity markets cheer the softening Fed expectations. The S&P500 extended gains yesterday and closed the session above the 4500 mark for the first time since April 2022, while Nasdaq 100 rallied another 1.73%. Amazon jumped to a 10-month high yesterday after reporting record sales during its Prime Day. Happily, this week's inflation numbers were sufficiently soothing, so that the record Prime Day sales didn't boost inflation expectations. MAMAA stocks were up by 1.72%. Crude oil on the other hand rallied past the 200-DMA, near $77pb, and consolidates at around that level this morning. Supply shortages in Libya and Nigeria are pushing price higher but the IEA says that global oil demand won't rise as much as they previously forecasted due to the weakened economies of developed nations. It will increase by around 2.2mbpd, +2%. This is 200'000 barrels less than previously forecasted. It could help bring the bears back to the market at around the 200-DMA. The $77/80 barrel resistance will be difficult to drill because the market is now approaching overbought conditions and a key technical level is generally a good moment to sell, and because otherwise it would be bad news for inflation expectations, and the Fed.    One good news is that, although the resilience of the US jobs market remains a major concern for the Fed, the stock market rally could be a much smaller concern because the Fed recently launched a financial conditions index, an index that takes into account bond yields, mortgage rates, the stock market, Zillow's house price index and the dollar's value on global currency markets to determine how the market conditions would impact growth. And the index showed that the financial conditions in the US became increasingly less favourable this year and hit an all-time peak in December when they were more of a drag on growth than at any time in recent decades, apart from the 2008 financial crisis. And at the current levels, the market conditions remain historically unfavourable to growth – and that despite the stock market rally.     Slow growth is bad for stock valuations, but investors remain focused on earnings, rather than the overall financial conditions, and we have good news on the earnings front so far. Delta Airlines for example jumped to the highest level since April 2021 yesterday after reporting after announcing record revenue and profit in Q2 andsaying that they are 'looking at a very, very strong Q3', as indicated by their guidance, and that they could have a strong Q4 as well. While PepsiCo rallied almost 2.40% after revealing a strong quarter thanks to higher prices they could ask from customers, and after raising its sales and earnings estimates. Today, some big US banks will go to the earnings confessional. The big banks benefited from ample deposit inflows following the Silicon Valley Bank (SVB) collapse in March, but their net interest income is expected to have declined, credit costs are normalizing, and they have increased expenses due to inflation. So, the numbers could be soft, but what matters for investors is the comparison between the numbers and expectations. If expectations are better than the actual numbers, stock prices will not be hurt. And that's why Goldman Sachs is out trying to dampen expectations, so that the results can more easily beat them!    By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank    
Soft US Jobs Data and Further China Stimulus Boost Risk Appetite

Mixed Sentiment as China's Q2 Growth Disappoints; US Earnings Take Center Stage

Michael Hewson Michael Hewson 17.07.2023 08:45
China growth disappoints. US earnings in focus The Chinese economy grew 6.3% in Q2 and that's faster than a 4.5% growth in Q1 but lower than the market estimate of 7.3%. Now don't be blindsided by the strong look of these numbers, because the latest figures were distorted by a low base effect last year when Shanghai and other big cities were in lockdown and life in China was running at a very low speed. If we look at a seasonally adjusted basis, the Chinese economy grew by only 0.8%, slowing sharply from a 2.2% rise in Q1.   Market sentiment regarding the weakening growth numbers is mixed. In one hand, weak growth means that the government and the People's Bank of China (PBoC) will step up efforts to further ease the financial conditions and pave the way for a quicker recovery. On the other hand, supportive policies put in place so far have had little impact. The Chinese property downturn, risk of disinflation, and falling exports have been difficult to reverse. As a result, the kneejerk reaction in markets was unenthusiastic. American crude extended retreat below the $75pb, after hitting and bouncing lower from the 200-DMA, that stands near $77pb last week. The rejection was expected, and the selloff could deepen toward the 100-DMA, near $73.50 level. Copper futures are also down this morning and testing the 100-DMA following a 7% rebound since the start of the month. Iron ore futures remain under pressure, and the Aussie is down nearly 1.30% against the US dollar, after forming a double top near the 69 cents level last week, on the back of a broad-based dollar weakness.   Zooming out, the US dollar is not further sold across the board this Monday, but the dollar index consolidates near the lowest levels since April 2022, and is below the 100 mark and is expected to further cool down. The softer dollar is good for cooling inflation elsewhere than the US, it could be good for boosting the revenues of US companies, including the Big Tech, which suffered from a rapid appreciation of the greenback last year, and it's good for boosting the US exports – which should support the US economic growth.   So, all eyes are now turning toward the US companies' earnings this week. The first earnings from the bis US banks came in better-than-expected last Friday and added to the overall investor enthusiasm after the US inflation data confirmed an encouraging easing in the US inflation, which in return softened the hawkish Federal Reserve (Fed) expectations and fueled a rally in both stock and bond markets.   JPMorgan Chase, Citigroup, and Wells Fargo all reported stronger-than-expected earnings last quarter due to rising interest rates. Deposits in Citigroup were nearly flat, Welss Fargo for saw its deposits fall 1% compared to Q1, and 7% compared to a year ago, and the average interest rates that the banks had to pay on deposits to prevent them from evaporating and going toward higher-yielding investments, rose 1-3% and their interest expenses climbed significantly. But still, JP Morgan's net interest income rose 44%, Citi's 16% and Wells Fargo's nearly 30%! Some smaller banks like Silicon Valley Bank, Signature Bank, and First Republic struggled with the effects of higher interest rates, as well. And deposit levels at major banks have been declining, with growth turning negative and reaching -6%, its lowest level in April. Blackrock amassed some good inflows and closed the quarter just shy of $10 trillion under management. The mix of the good and the bad led Citigroup shares 4% down. Wells Fargo first rallied before closing the day in the negative on Friday. The upcoming earnings reports from Bank of America, Morgan Stanley, and Goldman Sachs will be closely watched, among other big names.  On the list of companies that are due to release earnings this week, we find Netflix, Tesla, IBM, TSM, American Airlines and American Express. Overall, analysts project that S&P 500 companies will see the biggest contraction in earnings growth during the second quarter, where profits are expected to fall by 7-9% year-over-year. That doesn't really match what we see in the S&P500 chart, as the index advanced to a fresh high since April 2022 and is up by around 24% since last October dip. But the reality is that, with just over 5% of companies in the index having reported, profit growth for the period is on track to have contracted by 9.3% thus far, according to Bloomberg. It's too early to call of course because the tech is what carried the S&P500 this high over the past half-a-year and their earnings should be the ones to confirm the nice rally we saw on index level, but we could come down to earth with less shinier figures on that end. Yes, AI boosts revenue, and revenue expectations but Taiwan's exports of chips fell for the 6th consecutive month in June due to weaker global demand. Exports decreased more than 20% from a year earlier to a four-month low and when  you think that the island is home to some big and loved names like Apple and Nvidia's go-to chipmaker, TSMC, you question whether the biggest annual decline in Taiwan's chip exports since March 2009 isn't a warning that equity investors may have gone ahead of themselves when rushing to these stocks.     By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank  
Chinese Data Shakes Dollar, US Stocks Higher Amid Disinflation Concerns and Bank Earnings Awaited

Chinese Data Shakes Dollar, US Stocks Higher Amid Disinflation Concerns and Bank Earnings Awaited

Ed Moya Ed Moya 18.07.2023 08:22
Dollar wavers post Chinese data 10-year Treasury yield down 2.3 points to 3.809% JPMorgan extends gains post Friday’s earnings US stocks are slightly higher after some disappointing Chinese GDP data raised concerns about the global economy but supported the argument that disinflation pressures are firmly in place.  The disinflation story won’t be going away after Ford announced some big cuts with their electric F-150 truck prices.  The disinflation process should remain intact and that should support calls that the Fed will be done after one more rate hike at the end of this month.  Wall Street is bracing for some big bank earnings that might not mirror what JPMorgan said last week. The key to the stock market remains the mega-cap tech trade and many traders won’t do any major positioning until we hear from Netflix and Tesla.     China’s slowdown dragged European stocks.  Another record high for China’s youth unemployment won’t do any favors for demand for European goods in the coming months.  China still expects growth around 5% to be reached but that will be hard unless the PBOC delivers more stimulus.    US Data The first Fed regional survey showed that NY state factory activity managed to stay in expansion territory, while prices paid fell to the lowest levels since August 2020.  The headline general business conditions index dropped 6 points to 1.1. The manufacturing sector is expected to rebound here despite a slight rise with new orders and as shipments expanded.  The report noted that optimism remained subdued and that capital spending will remain soft.      The rest of the Fed regional surveys will likely show overall weakness in the manufacturing sector, along with optimism that pricing pressures are easing.    
EUR: Testing 1.0700 Support Ahead of ECB Meeting

A Week of Earnings and Central Bank Decisions: Fed, ECB, and BoJ Meetings in Focus

Ipek Ozkardeskaya Ipek Ozkardeskaya 24.07.2023 10:20
A week packed with earnings and central bank decisions Last week ended on a caution note after the first earnings from Big Tech companies were not bad, but not good enough to further boost an already impressive rally so far this year. The S&P500 closed the week just 0.7% higher, Nasdaq slipped 0.6%, while Dow Jones recorded its 10th straight week of gains, the longest in six years, hinting that the tech rally could be rotating toward other and more cyclical parts of the economy as well.   This week, the earnings season continues in full swing. 150 S&P500 companies are due to announce their second quarter earnings throughout this week. Among them we have Microsoft, which is pretty much the main responsible of this year's tech rally thanks to its ChatGPT, Meta, Alphabet, Visa, GM, Ford, Intel, Coca-Cola and some energy giants including Exxon Mobil and Chevron.   On the economic calendar, we have a busy agenda this week as well. Today, we will be watching a series of flash PMI figures to get a sense of how economies around the world felt so far in July, then important central bank meetings will hit the fan from tomorrow. The early data shows that both manufacturing and services in Australia remained in the contraction zone, as Japan's manufacturing PMI dropped to a 4-month low in July. German figures could also disappoint those watching the EZ numbers.   On the central banks front, the Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of Japan (BoJ) will meet this week, and the first two are expected to announce 25bp hike each to further tighten monetary conditions on both sides of the Atlantic.     Zooming into the Fed, activity on Fed funds futures gives almost 100% chance for this week's 25bp hike. But many think that this week's rate hike could be the last of this tightening cycle, as inflation is cooling. But the resilience of the US labour market, and household consumption will likely keep the Fed cautiously hawkish, and not announce the end of the tightening cycle this Wednesday. There is, on the contrary, a greater chance that we will hear Fed Chair Jerome Powell rectify the market expectations and talk about another rate hike in September or in November. Therefore, the risks tied to this week's FOMC meeting are tilted to the hawkish side, and we have more chance of hearing a hawkish surprise rather than a dovish one. Regarding the market reaction, as this week's Fed meetings falls in the middle of a jungle of earnings, stock investors will have a lot to price on their plate, so a hawkish statement from the Fed may not directly impact stock prices if earnings are good enough. Bond markets, however, will clearly be more vulnerable to another delay of the end of the tightening cycle. The US 2-year yield consolidates near the 4.85% level this morning, and risks are tilted to the upside. For the dollar, there is room for further recovery as the bearish dollar bets stand at the highest levels on record and a sufficiently hawkish Fed announcement could lead to correction and repositioning.  Elsewhere, another 25bp hike from the ECB is also seen as a done deal by most investors. What investors want to know is what will happen beyond this week's meeting. So far, at least 2 more 25bp hikes were seen as almost certain by investors. Then last week, some ECB officials cast doubt on that expectation. Now, a September rate hike in the EZ is all but certain. The EURUSD remains under selling pressure near the 1.1120 this morning, the inconclusive Spanish election is adding an extra pressure to the downside.   Finally, the BoJ is expected to do nothing, again, this week. Japanese policymakers will likely keep the policy rate steady in the negative territory and the YCC policy unchanged. The recent U-turn in BoJ expectations, and the broad-based rebound in the US dollar pushed the USDJPY above the 140 again last Friday, and there is nothing to prevent the pair from re-testing the 145 resistance if the Fed is sufficiently hawkish and the BoJ is sufficiently dovish.     By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank  
FX Daily: Resistance to Dollar Strength is Futile

USD/JPY Yen Dives on BOJ's Yield Curve Control Stance

Ed Moya Ed Moya 24.07.2023 10:32
USD/JPY  Yen dives on reports BOJ sees little need to adjust YCC   Central bank-a-palooza was supposed to start next week, but traders got a head start after reports surfaced that the BOJ saw little urgency to adjust their yield curve control program (YCC).  It looks like FX traders are expecting the BOJ to maintain their ultra-loose monetary policy and for the Fed to deliver a quarter-point rate rise and to have a wait-and-see approach about the September meeting.  The Japanese yen is the weakest major currency and that could remain the case if risk appetite remains healthy.  It seems that while the BOJ stands pat, the other major central banks are tightening and that should continue to drive that interest rate differential trade. Soft landing hopes are not getting derailed by earnings season so far, in fact market breadth in the stock market continues to improve which could help keep the rally going strong.   Initial Rate Decision Expectations The Fed will raise rates by 25bps and likely signal a wait-and-see approach for the September meeting (saving that decision for the end of August at Jackson Hole). Analysts are unanimously expecting the ECB to raise all three key rates by 25bps but are unsure what will happen in September The BOJ is expected to keep rates steady, no change to YCC, and revise up its inflation forecasts for this year alone.     Soft stochastics suggest euro pullback       The EUR/USD weekly chart shows a bearish bias could be emerging as the slow stochastics overbought conditions is seeing a tentative drop below the 200-week SMA.  If bearish momentum accelerates key support will come from the 1.1080 level, with major support eyeing the heavily tested 1.1030 price level.  Intraday resistance resides at the 1.1150 level, with major resistance be provided by the psychological 1.1200 handle.   Nasdaq Friday Volatility The Nasdaq could see excessive volatility at the close as a special rebalancing will address overconcentration in the index by redistributing the weights.  In addition to this special rebalancing, traders will have to deal with options expiration. Three mega-cap tech giants (Apple, Nvidia and Microsoft) make up almost 30% of the weight in the fund, which is not diverse enough for a key index.  Some profit-taking might occur ahead of busy next week that contains handful of market moving events that include three big rate decision, several key earnings, and key GDP, ECI , and PCE data.  
China Continues to Increase Gold Reserves, While Base Metals Face Mixed Fortunes

US Fed Set to Resume Rate Hikes Amidst Mixed Economic Data: A Look at Key Indicators and Earnings Ahead

Ed Moya Ed Moya 24.07.2023 10:57
US The Fed is expected to resume raising rates at the July 26th FOMC meeting.  Fed funds futures see a 96% chance that the central bank will deliver a quarter-point rate rise, bringin the  target range to between 5.25% and 5.50%, almost a 22-year high. The Fed delivered 10 straight rate increases and then paused at the June FOMC meeting.  The Fed is going to raise rates on Wednesday and seems poised to be noncommittal with what they will do in September.  The economic data has been mixed (strong labor data/cooling pricing pressures) and that should support Powell’s case that they still could deliver a soft landing, a slowdown that avoids a recession.  This seems like it will be the last rate hike in the Fed’s tightening cycle, but we will have two more inflation reports before the Fed will need to commit that more rate hikes are no longer necessary. The Fed will steal the spotlight but there are several other important economic indicators and earnings that could move markets.  Monday’s flash PMI report should show both the manufacturing and service sectors continue to soften, with services still remaining in expansion territory. Tuesday’s Conference Board’s consumer confidence report could fuel expectations of a soft landing. Thursday’s first look at Q2 GDP is expected to show growth cooled from 2.0% to 1.8% (0.9%-2.1% consensus range) as consumer spending moderated.  Friday contains the release of personal income and spending data alongside the Fed’s preferred inflation and wage gauges. The Q2 Employment Cost Index (ECI) is expected to dip from 1.2% to 1.1%. The personal consumption expenditures price index is expected to cool both on a monthly and annual basis (M/M: 0.2%e v 0.3% prior;Y/Y: 4.2%e v 4.6% prior). Earnings will be massive this week as we get updates from 3M, AbbVie, Alphabet, Airbus, AstraZeneca, AT&T, Barclays, BASF, Biogen, BNP Paribas, Boeing, Boston Scientific, Bristol-Myers Squibb, Chevron, Chipotle Mexican Grill, Comcast, Exxon, Ford Motor, General Electric, General Motors, GSK, Hermes International, Honeywell International, Intel, Mastercard, McDonald’s, Meta Platforms, Microsoft, Nestle, PG&E, Procter & Gamble, Raytheon Technologies, Samsung Electronics, STMicroelectronics, Texas Instruments, Thermo Fisher Scientific, UniCredit, Unilever, Union Pacific, Verizon Communications, Visa, and Volkswagen
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

Microsoft Falls, Google Jumps, and the Fed Makes a Decision - IMF Raises Global Growth Outlook

Ipek Ozkardeskaya Ipek Ozkardeskaya 26.07.2023 08:23
Microsoft falls, Google jumps, Fed decides Surprise, surprise: Microsoft failed to meet investor expectations when it announced its Q2 results yesterday. Both revenue and earnings beat expectations, but the company reported a decelerating demand for its cloud computing services to 26%, and projected Azure to grow between 25%-26% for the current quarter. We are far from the 35% growth that we got used to in the good old days. Microsoft stock plunged up to 4% in the afterhours trading. Alphabet on the other hand a strong quarter for its search business advertisement, hinting that Google search withstood so far with the AI competition and its cloud business posted a 28% growth, more than Microsoft's. Google shares jumped 6% after the bell. Elsewhere, Snap tanked almost 20% as the overall sales declined and the forecasts remained short of analyst expectations, while GM lost 3.50% yesterday after raising its earnings forecast. But there is a catch: the forecast holds only if the workers don't go on a strike, and according to Evercore ISI, the chances of a strike is about 50-50. Today, Meta, Coca-Cola and Boeing will be among the big names that will report their earnings. The S&P500 advanced to the highest levels since April 2022, while Nasdaq 100 was up by 0.73% yesterday.    IMF raises global growth outlook  Zooming out, the IMF raised its outlook for the world economy this year and it now expects the global GDP to expand 3% in 2023. But it also warned that Germany will probably be the only G7 economy to suffer an economic contraction this year. Of course, the IMF also warned that there are some risks to their optimistic forecast, including the higher interest rates, the Chinese recovery that doesn't come, the debt distress and shocks from war and climate related disasters. But all in all, the US economy will likely end this year as the champion of soft landing – if all goes well.   I insist - if all goes well - because PacWest has been the latest US regional bank to succumb to this year's bank stress and its shares plunged 27% after Banc of California agreed to buy it.     Decision time!  Anyway, positiveness around the US economy is obviously giving some hawkish ideas to the Federal Reserve (Fed), which will likely announce another 25bp hike today, and warn that there could be more in the store. The US 2-year yield is in a wait-and-see more near the 4.90% level, either it will go back above the 5% with a hawkish Fed statement or it will retreat toward the 50-DMA, near the 4.65%, with a reasonably hawkish Fed statement, if the Fed opts for another 'skip' for example. The US dollar index pushes higher as expectations for other central banks soften due to the softer-than-expected economic data suggesting softer action from the likes of European Central Bank (ECB) and the Bank of England (BoE) in the coming months. The EURUSD continued its nosedive yesterday on IMF's less than ideal Germany outlook and the news that corporate loan demand plunged by the most on record in Q2, as higher rates started to bite European businesses.   Unfortunately, however, inflation expectations are getting stronger globally as the rising energy and crop prices hint that the upcoming inflation figures won't be a piece of cake. The barrel of US crude flirted with the $80pb level on Chinese stimulus hopes and the pricing of a soft landing, while wheat futures continue rising along with the escalating tensions in the Black Sea and Danube. Corn and soybean futures rise as well as hot weather in the US belt is adding to the positive pressure for corn.     By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank  
China Continues to Increase Gold Reserves, While Base Metals Face Mixed Fortunes

Chinese Stimulus Hopes Fail to Lift FTSE; Unilever Reports Strong Earnings as UK100 Nears All-Time Highs

Craig Erlam Craig Erlam 26.07.2023 08:48
Chinese stimulus hopes fails to lift the FTSE Unilever among the best performers in the index after reporting earnings UK100 not far from all-time highs   It’s been another relatively flat session for equity markets, with investors seemingly having one eye on the Fed and ECB later in the week despite a strong showing in Chinese stocks earlier in the day. They were lifted by the promise of Chinese stimulus following the Politburo meeting this week and some potential relief for the property market. It’s been a tougher re-emergence from zero-Covid than many anticipated, with consumers still seemingly holding back and the property sector still reeling from the previous crackdown. The enthusiasm hasn’t filtered through to Europe and the US though, perhaps due to the lack of detail currently on the stimulus measures, but also the distraction of the central bank meetings over the next 48 hours. Progress on inflation could mean both the Fed and ECB are about to announce their final rate hikes of the tightening cycle; the question is will they acknowledge that or maintain a hawkish position over the rest of the summer? Unilever rallies amid hints at price pressures easing Unilever is among the top performers on the FTSE 100 today, buoyed by a surge in profits in the last quarter. It comes at a challenging time when high inflation is pushing up costs and there is a growing spotlight on producers and supermarkets amid claims of profiteering. What’s more, the cost-of-living crisis is pushing consumers toward cheaper own-brand products which partly contributed to a decline in sales volumes. The company did reassure investors that pressures are easing though which should be good news for households and the share price is also reaping the rewards, up around 5%.     Can the UK100 take the next step? The UK100 has been on a good run over the last few weeks, taking it towards 7,700 where it is now running into some resistance.     This has previously been a very notable area of resistance, most recently in the middle of June, and so overcoming it could be a significant bullish signal for the markets. The index is not trading too far from its all-time highs at this stage and so a break of this could draw attention to a few notable levels. We’ve seen 7,800 and 7,850 provide plenty of support and resistance over the course of this year and so that area stands out on the chart. After that, there are a few more areas where price previously ran into some difficulty ahead of the high just above 8,000. Around these levels, the stochastic and MACD indicators could offer some useful information on how much momentum remains with the rally and whether we’re potentially seeing doubts or profit-taking kicking in.
Pound Sterling: Short-Term Repricing Complete, But Further Uncertainty Looms

European Markets React to US Rating Downgrade and Economic Concerns

Michael Hewson Michael Hewson 02.08.2023 08:22
European markets set to open lower after US rating downgrade     We saw a negative start to August for European markets with the DAX leading the way lower, having only put in a new record high the day before, after poor manufacturing PMIs and disappointing earnings prompted profit taking.   Yesterday's weakness appears to have been prompted by concern that the economy is a little bit weaker than perhaps people would like, raising concern for earnings growth heading into the second half of the year. US markets also finished the day lower, although closing well off the lows of the day with the Dow managing to eke out a gain. US yields also finished the day higher, on the rising realisation that rates may well have to stay at current levels for quite a while yet.     This profit taking has continued overnight after Fitch downgraded the US credit rating to AA+ from AAA, while simultaneously boosting demand for haven assets, with Asia markets falling sharply, and which looks set to translate into a sharply lower European open.   The increase in crude oil prices over the past 4 weeks is also raising concern that the falls in input prices that we've seen over the last few months might start to hit a floor and start rising again. Yesterday we got another snapshot of the US labour market as US job openings (JOLTS) fell to their lowest levels since April 2021, although they are still well above the levels, they were pre-pandemic. The latest employment component in the July ISM manufacturing survey also slowed to its lowest level since July 2020.     Today we get the latest insight into private sector hiring with the ADP employment report for July which is unlikely to repeat the bumper 497k seen in the June numbers. We should also be prepared for a downward revision to that report with July expected to see a more moderate 190k, as we look towards Friday's more important non-farm payrolls numbers. While stocks slipped back yesterday the US dollar rose to a 3-week high, gaining ground across the board on the grounds of the broader resilience of the US economy.     EUR/USD – still finding support at the 1.0940 lows from last week with further support at the 50-day SMA as well as the 1.0850 area. Resistance currently at last week's high at 1.1150.     GBP/USD – has continued to slide lower towards trend line support from the March lows at 1.2710, and the 50-day SMA at 1.2700. While above this key support the uptrend from the March lows remains intact. Resistance at the 1.3000 area.         EUR/GBP – popped briefly above the resistance at the 0.8600 area, before slipping back again, with the risk of a return to the recent lows at 0.8500/10. We need to see a concerted move above 0.8620 to target the July highs at 0.8700/10.     USD/JPY – continues to move through the 142.00 area, with the next target at the previous peaks at 145.00. Support comes in at this week's lows at 140.70.     FTSE100 is expected to open 30 points lower at 7,636     DAX is expected to open 88 points lower at 16,152     CAC40 is expected to open 36 points lower at 7,370   By Michael Hewson (Chief Market Analyst at CMC Markets UK)  
Pound Sterling: Short-Term Repricing Complete, But Further Uncertainty Looms

European Markets React to US Rating Downgrade and Economic Concerns - 02.08.2023

Michael Hewson Michael Hewson 02.08.2023 08:22
European markets set to open lower after US rating downgrade     We saw a negative start to August for European markets with the DAX leading the way lower, having only put in a new record high the day before, after poor manufacturing PMIs and disappointing earnings prompted profit taking.   Yesterday's weakness appears to have been prompted by concern that the economy is a little bit weaker than perhaps people would like, raising concern for earnings growth heading into the second half of the year. US markets also finished the day lower, although closing well off the lows of the day with the Dow managing to eke out a gain. US yields also finished the day higher, on the rising realisation that rates may well have to stay at current levels for quite a while yet.     This profit taking has continued overnight after Fitch downgraded the US credit rating to AA+ from AAA, while simultaneously boosting demand for haven assets, with Asia markets falling sharply, and which looks set to translate into a sharply lower European open.   The increase in crude oil prices over the past 4 weeks is also raising concern that the falls in input prices that we've seen over the last few months might start to hit a floor and start rising again. Yesterday we got another snapshot of the US labour market as US job openings (JOLTS) fell to their lowest levels since April 2021, although they are still well above the levels, they were pre-pandemic. The latest employment component in the July ISM manufacturing survey also slowed to its lowest level since July 2020.     Today we get the latest insight into private sector hiring with the ADP employment report for July which is unlikely to repeat the bumper 497k seen in the June numbers. We should also be prepared for a downward revision to that report with July expected to see a more moderate 190k, as we look towards Friday's more important non-farm payrolls numbers. While stocks slipped back yesterday the US dollar rose to a 3-week high, gaining ground across the board on the grounds of the broader resilience of the US economy.     EUR/USD – still finding support at the 1.0940 lows from last week with further support at the 50-day SMA as well as the 1.0850 area. Resistance currently at last week's high at 1.1150.     GBP/USD – has continued to slide lower towards trend line support from the March lows at 1.2710, and the 50-day SMA at 1.2700. While above this key support the uptrend from the March lows remains intact. Resistance at the 1.3000 area.         EUR/GBP – popped briefly above the resistance at the 0.8600 area, before slipping back again, with the risk of a return to the recent lows at 0.8500/10. We need to see a concerted move above 0.8620 to target the July highs at 0.8700/10.     USD/JPY – continues to move through the 142.00 area, with the next target at the previous peaks at 145.00. Support comes in at this week's lows at 140.70.     FTSE100 is expected to open 30 points lower at 7,636     DAX is expected to open 88 points lower at 16,152     CAC40 is expected to open 36 points lower at 7,370   By Michael Hewson (Chief Market Analyst at CMC Markets UK)  
CHF/JPY Hits Fresh All-Time High in Strong Bullish Uptrend

China's Surprise Rate Cut: A Band-Aid Solution for Deeper Economic Woes

Ipek Ozkardeskaya Ipek Ozkardeskaya 16.08.2023 11:58
China's surprise cut won't be enough.  By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank   China surprised by cutting its one-year medium-term lending facility (MLF) rates by 15bp to 2.50% today to give a jolt to its economy that has not only completely missed the expectation of a great post-Covid recovery, but that deals with deepening property crisis, morose consumer, and investor sentiment – which is worsened by Country Garden crisis and missed payments from the finance giant Zhongzhi Enterprises. Data-wise, things looked as worrying as we expected them to look when China released its latest set of economic data today. Growth in industrial production unexpectedly dipped to 3.7%, retail sales unexpectedly fell to 2.5%, unemployment worsened, while growth in fixed investments dropped further. Foreign investment in China fell to the lowest levels since 1998, and the 13F filings showed that Big Short's Michael Burry already exited Alibaba and JD.com, just months after increasing his exposure to these Chinese tech giants. People's Bank of China's (PBoC) surprise rate cut will hardly reverse appetite for Chinese investments as meaningful fiscal stimulus becomes necessary to stop halting.       The Hang Seng remains under pressure, the Chinese yuan fell to the lowest levels against the US dollar since last November, before the post-Covid reopening, and crude oil stagnates around the $82.50pb, close to where it was yesterday morning at around the same time. Tight supply and warnings of increased risk to shipping near the Strait of Hormuz, which is a strategic waterway for oil transit for exporters like Saudi Arabia and Iraq, certainly helped tempering the China-related selloff. But the demand side is weakening and that could stall the oil rally at the actual levels, forcing a return of the barrel of US crude toward the $80pb level, as worries regarding the Chinese recovery are real, and China will have to deploy further stimulus measures to fix things and bring investors back on their side of the table. If that's the case however, oil prices could take a lift.      Elsewhere, Argentina devaluated its currency by 18% to 350 per dollar and hiked its interest rates by 21 percentage points to 118% after populist Javier Milei won the presidential primary, while the dollar ruble traded past the 100 mark for the first time since Russia invaded Ukraine and the Indian rupee traded near record, as well. So all that helped the US dollar index shortly trade above its 200-DMA yesterday, a day before the release of the FOMC minutes which could hint that most Federal Reserve officials were certainly happy with the progress on inflation, but not yet convinced that the war against inflation is won just yet. And given the rebound in global energy and food prices, the Fed officials' careful approach to inflation looks like it makes sense. That's certainly why the US 2-year yield continued its advance toward the 5% mark yesterday, even though the latest survey from New York Fed showed that inflation expectations recorded a sharp drop to 3.6% for the next twelve months and fell to 2.9% for the next three years. The same survey showed that the mean unemployment expectation fell by 1 percentage point, giving support to goldilocks or to the soft landing scenario. Goldman now expects the Fed to cut rates in the Q2 of next year. It also said it expects core PCE to have fallen below 3% by that time.       Today, investors will focus on the US Empire manufacturing index and the retail sales data, and earnings from Home Depot will also hit the wire. While expectation for Empire manufacturing points at a negative number, consensus for July retail sales is a slight acceleration on a monthly basis. Any improvement on the US data is poised to further back the pricing of soft landing and give a further boost to both the US dollar and the US stocks.  The S&P500 recovered yesterday, as Nasdaq 100 advanced more than 1% with technology stocks leading the rebound. Nvidia was one of the best performers with a 7% jump after a Morgan Stanley analyst reiterated his $500 per share price target yesterday. But Tesla didn't benefit from the tech rally of yesterday and closed the session below $240 per share after cutting its car prices in China, yet again.    
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

FX Analysis: Dollar Index Holds Above 200-DMA, EURUSD on Bearish Path, Energy Market Remains Uncertain, Nvidia Earnings Awaited

Ipek Ozkardeskaya Ipek Ozkardeskaya 23.08.2023 10:08
In the FX  The dollar index remains bid above its 200-DMA – though we see a slowing positive trend, and weakening trend and momentum indicators. While I believe that there is room for further USD recovery, we could well see a temporary downside correction in the next few days, depending on what Powell will say, and how the markets will react. The EURUSD is still on a decidedly bearish path. Trend and momentum indicators remain comfortably bearish, and the pair is not yet at the oversold market conditions; the actual selloff could extend toward the 200-DMA, near the 1.08 mark. The USDJPY is steady a touch above the 145 mark, as the possibility of a direct FX intervention holds many traders back from topping up their short yen positions. Cable on the other hand sees resistance at its 50-DMA, a touch below the 1.28 mark.  In energy, the US crude remains close to the $80pb psychological mark, lacking a clear short-term direction. Therefore, this week's US inventories report could help traders decide whether they want to play the slow China demand rhetoric or continue backing the supply tightness narrative. In both cases, we shall see range-bound trading within the $75/85 range, including the 200-DMA and the August peak.     Nvidia goes to the earnings confessional!  Today, all eyes are on Nvidia earnings due after the closing bell. Investors will focus on whether Nvidia's Q2 sales meet the $11bn estimate. Anything less than absolutely fantastic could trigger a sharp downside correction in Nvidia's stock price which rallied 345% since the October dip.      
Earnings, Soft PMIs, and Market Dynamics: Impact on Yields, Dollar, and Key Developments

Earnings, Soft PMIs, and Market Dynamics: Impact on Yields, Dollar, and Key Developments

Ed Moya Ed Moya 24.08.2023 12:47
Earnings and soft services PMIs sends yields and dollar lower Fed rate hike odds for September 20th meeting stand at 11% (down from yesterday’s 16%) Russian mercenary leader Prigozhin may have died in plane crash The US dollar remained near session lows against the Japanese yen after the Treasury’s mixed 20-year auction.  The bond market rally that started yesterday is holding up after decent demand saw a 4.499% yield, which was higher than the pre-sale yield of 4.490%, and obviously above the 3.954% prior 20-year bond auction.  Eventually the bond market will fixate over foreign demand, but for now the Treasury doesn’t seem to be seeing have any trouble with the extra issuance.   PMIs Both the dreadful eurozone PMIs and softening US ones helped keep the bond market rally going and that should help with the global disinflation process. Rates are coming down and so are Fed rate hiking expectations.   Earnings For a second consecutive quarter, Foot Locker significantly slashed their guidance.  Wall Street was already skeptical of how Foot Locker would finish the year, but the outlook just went from bad to abysmal.  Foot Locker suspended their dividend and cut their full-year sales and earnings guidance, noting softening trends in July. A tough consumer backdrop is only going to get worse, which could lead to a few ugly quarters for the footwear chain. Abercrombie & Fitch Co. earnings were the exact opposite to what came out of Foot Locker.  Abercrombie is raising their outlook as their customers appear to be bucking the trend we saw from Macy’s and Kohls.   All the signs are there for the outlook to get worse for the consumer. Mortgage rates are over 7% for the first time in nearly 2 decades.  Credit card debt just jumped over $1 trillion as Generation X has the highest balance.  The US job market is showing signs of cooling and that should continue as consumer spending softens.   USD/JPY daily chart     The USD/JPY chart is tentatively pulling back as global bond rates decline following weak global PMIs.  Despite the two-day slide, a bullish bias might remain if the long end of the curve sees rates remaining elevated.  If bearish momentum remains, the 142.75 will provide initial support.  To the upside the 147.50 provides key resistance, while the 150.00 level remains a key price barrier.
Understanding the Factors Keeping Market Rates Under Upward Pressure

UK Yields Fall Amid Economic Uncertainty as BoE Considers Further Rate Hikes

Craig Erlam Craig Erlam 25.08.2023 09:34
UK yields fall amid economic uncertainty BoE expected to raise rates twice more this year to 5.75% Cable testing key support for a second day   The pound is on the decline again on Thursday, having fallen over the last couple of days on the back of some worrying economic figures from the UK. Whether we’re talking about a blip in the data or cracks finally appearing in the economy after a very aggressive tightening cycle from the Bank of England, traders are paring back expectations for interest rates once more. We’re seeing UK 10-year bonds rising today (yields falling) which goes against the trend we’re seeing across Europe, the US, and Japan, for example. Two more hikes are still priced in over the coming months but that could be pared back further if the data continues on the same path, especially if we see some better wage numbers following the spike in the three months to June. That weakness in the pound may be helping the FTSE to outperform today, with it being one of the only European indices still in the green after early gains – seemingly driven by knockout earnings from Nvidia – fizzled out over the course of the day.   Fourth time’s a charm? The pound has fallen close to 1.26 on three other occasions so far this month, each time falling a little short somewhere between 1.2610 and 1.2620 before rebounding higher.   The least convincing of these rebounds came yesterday, with the price once again trending down today to once again come close to those prior lows. The difference so far today is there’s no sign of a recovery and, at the time of writing, the price remains below the 55/89-day simple moving average band. On each of the last three occasions, the price closed back within here or higher. A close below here would be the first since March and if accompanied by a new two-month low and break of 1.26, could be a very bearish signal for cable. Of course, with Jackson Hole underway, there’ll be a lot of central bank speak over the next couple of days which could sway this one way or another which is worth bearing in mind. But right now, the pair is looking under some pressure.    
Unraveling the Resilience: US Growth, Corporate Debt, and Market Surprises in 2023

Unraveling the Resilience: US Growth, Corporate Debt, and Market Surprises in 2023

Franklin Templeton Franklin Templeton 31.08.2023 10:50
The resilience of US growth, earnings, and markets in 2023 has surprised many. After more than a year of aggressive Federal Reserve (Fed) rate hikes, the fact that the United States managed to avoid a recession, experience an upswing in US corporate earnings expectations, and witness a strong rebound in major equity indexes was unexpected at the beginning of the year. While numerous explanations have been offered to account for these phenomena, one crucial factor seems to have been overlooked—US private sector debt. Over the past 15 years, significant changes have occurred in US household and corporate sector indebtedness, reshaping the economy, profits, and equity valuations. These changes have made these factors less sensitive to monetary policy than they have been in over a generation.     The resilience of US growth, earnings and markets has been the big surprise of 2023. Following more than a year of aggressive Federal Reserve (Fed) rate hikes, few would have believed at the beginning of this year that the United States would avoid a recession, see an upswing in US corporate earnings expectations, and enjoy a strong rebound of major equity indexes. While many explanations have been offered to explain these phenomena, one important factor has been generally overlooked—US private sector debt. Over the past 15 years, US household and corporate sector indebtedness has changed significantly and in ways that make the economy, profits and equity valuations less sensitive to monetary policy than at any time in over a generation. We will focus on the corporate debt story here. But we must note that household borrowing habits have also changed in important ways since the global financial crisis (GFC). Total household debt, as a share of gross domestic product (GDP), has fallen by nearly a third since 2008. Credit standards have tightened, with fewer at-risk households able to borrow or borrow as much. And, importantly, mortgage borrowing has reverted to conventional 30-year fixed rate mortgages and away from floating rate or adjustable-rate mortgages. As a result, the lags between the Fed’s short-rate hikes and debt servicing costs in the household sector have lengthened. Those factors alone help explain why the US economy and consumer spending have held up better than many thought they would at the onset of 2023. A strong labor market, underpinned by post-COVID re-hiring, shortages of able-bodied workers, and fiscal stimulus have also contributed significantly to the resilience of demand. But for economists, policymakers and investors, there has been another interesting debt development underway: the absence of any discernable impact of rising interest rates on corporate profitability. That outcome deserves closer attention, because it has important implications for growth, profits and equity as well as credit market outcomes.   What has changed? Just as for the household sector, the GFC unleashed significant changes in the way companies borrow. Although overall corporate de-leveraging was more modest for companies than households since the GFC, a similar development has taken place in the tenor of borrowing. Specifically, one of the consequences of the GFC was to reduce company reliance on short-term borrowings such as commercial paper or bank loans and replace it with public and private credit instruments with longer maturities and fixed terms. For example, the commercial paper market was roughly $2.2 trillion in mid-2007 and as of August 2023, it is close to $1.2 trillion.1 In that same span, US investment-grade and US high-yield debt markets have mushroomed from $2.1 trillion to $7.8 trillion, and from $0.7 trillion to $1.2 trillion respectively.2 Meanwhile, global private credit has grown by $1 trillion.3 Mostly, those borrowings are fixed rate and the average maturities across these three asset classes range from 4 to 10 years.   Accordingly, lags between rising interest rates (courtesy of Fed tightening) and corporate debt servicing costs have lengthened. As a result, the corporate sector, by virtue of structural changes in corporate finance, has thus far been sheltered from the harshest impacts of what has otherwise been an aggressive series of Fed rate hikes since early 2022. But that is not all. As the most recent data for the second-quarter 2023 earnings season shows, companies across many sectors are reporting falling net interest costs, despite higher interest rates at all maturities. How is that possible? Part of the answer resides in an inverted yield curve, with short-term rates above long-term rates. Companies with high cash balances (based on resilient earnings as well as prudent capital spending) are enjoying higher interest revenues by parking their money in short-dated notes, but low interest costs having locked in lower rates via longer-term borrowing. The corporate sector is, in sum, playing an inverted yield curve to its benefit. That is a contributing factor to explain why, for virtually every sector in the S&P 500 Index (except for consumer staples and health care), net interest expense as a percentage of net profit is lower today than it was 20 years ago. Indeed, for the S&P 500 as whole, net interest expense as a percentage of net profit is today only about 40% of its 2003 level.4 The result is higher earnings—boosting share prices—as well as a more resilient corporate sector to Fed tightening. But is this happy situation sustainable? In the long run, no. At some point, new borrowings are required and maturing debt must be rolled over. If borrowing costs remain elevated, the good times will go away. But the corporate debt shield may yet endure for longer. That is because maturity extension has been significant for many companies and across many sectors. Since the end of 2020, for example, the proportion of investment-grade debt maturing after 2028 has gone from roughly 48% to 56%.5 This trend is even more pronounced among high yield (sub-investment grade) borrowers, with the proportion of borrowings extending beyond 2028 rising from 20% to roughly 42% of the market.6 And, of course, if rates fall between now and then (as would seem likely as inflation recedes), then companies may refinance on more agreeable terms before their debt matures.   It is also interesting to see where these developments are particularly significant. Within investment- grade markets, financials lead the way with a 50% increase in longer dated debt.7 The energy and technology sectors have witnessed increases of over 25%.8 At the other end of the borrowing spectrum, health care has not recorded a similar shift in debt maturity and, perhaps as a result, it has seen net interest expense take a bigger chunk out of net earnings in recent quarters.     The fact that profits have been shielded from the impacts of Fed tightening helps explain continued company interest in hiring. It also points to a positive feedback loop between profits, employment and demand that, while not sustainable forever, has helped to support US economic growth well into 2023. If so, the resilience of earnings and growth has another key implication for investors—namely reduced default risk. Credit risk is more nuanced. Individual defaults remain possible, and some will be unavoidable. But barring a freezing up of lending markets, overall corporate default rates are likely to be lower in this cycle than in prior ones.
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

Michael Hewson Michael Hewson 04.09.2023 10:36
Ashtead Q1 24 – 05/09 – has been one of the better performers on the FTSE100 this year, Ashtead's exposure to the US market ensuring that it has benefitted from the resilience of the US economy, through its US subsidiary Sunbelt. When the company reported its Q4 and full year numbers back in June the shares slipped back. Increased rental revenue has helped boost revenues and profits, with Q4 revenue rising from $1.87bn a year ago to $2.13bn. Full year revenues rose by 24% to $9.67bn, helping to boost pre-tax profits by 30% $2.15bn. For Q1 revenues are expected to rise to $2.65bn, with Sunbelt US expected to contribute $2.27bn of that, with operating margins expected to remain steady at 30%. Net profit is expected to increase to $476m.     GameStop Q2 24 – 06/09 – the last two earnings reports have seen decent gains in the GameStop share price, however on both occasions these spikes proved to be the top of the moves higher with the share price now close to its lowest levels this year. It would appear that the higher rate environment is blunting risk appetite to these so-called meme stocks and its not hard to see why. While the company posted a surprise profit in Q4, it slipped back to a loss in Q1 of -$0.14c a share and is expected to see a similar loss in Q2 as well. Q1 revenues came in at $1.24bn, with hardware and accessories making up over half of that total at $726m. For Q2 revenues are expected to come in at $1.14bn, although inventories should reduce to $600m. Same store sales are expected to decline by 0.1%.   DocuSign Q2 24 – 07/09 – DocuSign shares have had a disappointing time of it year to date, its shares slightly lower year to date, despite generally seeing their recent quarterly numbers coming in better than expected. They haven't really recovered from the weak guidance it issued at the end of last year when it gave weak guidance for Q1. When DocuSign reported in June, revenues came in comfortably ahead of expectations at $661.4m, while profits came in at $0.72c a share, sending the shares sharply higher initially, but the gains didn't last, even as guidance was upgraded for Q2 revenue of $675m to $679m, while full year revenue forecast was raised to between $2.71bn to $2.73bn.    
Unlocking Japan's AI Potential: Investment Opportunities and Risks

Finance in Flux: UBS's Record-Breaking Profits and Shifting Industry Tides

FXMAG Education FXMAG Education 05.09.2023 12:13
In the ever-evolving world of finance, recent developments have brought about significant changes in the banking sector. From historic profits to a shift away from remote work, these developments are reshaping the industry. Let's explore the key events that are making waves in the financial world.   Historic Profits at UBS One of the standout events in the financial sector is UBS's remarkable Q2 profit of $28.8 billion. This achievement can be largely attributed to the bank's acquisition of Credit Suisse, marking it as a historic milestone. This financial juggernaut's success underscores the importance of strategic acquisitions in the banking industry.   Return-to-Office Initiatives In a noteworthy shift, banks are taking a tougher stance on employees who prefer remote work. The era of widespread remote work, necessitated by the pandemic, is slowly coming to an end. Banks are now urging their staff to return to the office, signaling a return to pre-pandemic work norms. This change carries implications for work culture and the future of office spaces in the banking world.   Carbon Credit Market Uncertainty Confidence in the carbon credit market is waning. Carbon credits have been a vital tool in mitigating climate change, but recent events have raised concerns. As major players step back from the market, questions are being raised about its future effectiveness. The uncertainties surrounding carbon credits could have far-reaching consequences for environmental policies and sustainability efforts.   China's Economic Boost China, a key player in the global economy, is actively taking steps to boost its economic standing and strengthen its currency. As the world watches China's efforts to stimulate its economy, the implications for global markets are significant. The strategies employed by China could influence trade, investment, and currency dynamics on a global scale.   Airline Earnings Under Pressure The airline industry is facing headwinds as earnings outlooks dim. Factors such as rising fuel costs and economic uncertainties are impacting the profitability of airlines. As travelers cautiously return to the skies, airline companies are navigating a complex and challenging landscape.   NYC's Pension CIO Perspective In the realm of investment, the Chief Investment Officer (CIO) of New York City's Pension Fund provides insights into the impact of Wall Street's Environmental, Social, and Governance (ESG) pullback. Despite the recent trend of ESG considerations in investments, NYC's Pension Fund remains resilient, shedding light on the varying responses of institutional investors to ESG factors. The banking and financial sector is undergoing a period of significant transformation. UBS's historic profit, the return-to-office trend, carbon credit market concerns, China's economic endeavors, airline industry challenges, and the nuanced response to ESG factors are all contributing to a dynamic landscape. These developments not only shape the industry but also have broader implications for the global economy. As the financial world continues to evolve, staying informed and adaptable is key to navigating these changes successfully.    
Breaking Business News: Aaron Rodgers' Shocking Exit, Google's Defense, and Central Banks' Inflation Battle

Breaking Business News: Aaron Rodgers' Shocking Exit, Google's Defense, and Central Banks' Inflation Battle

FXMAG Education FXMAG Education 13.09.2023 14:36
In the ever-evolving landscape of the business world, it's essential to stay updated on the latest developments and trends that can shape industries and markets. This week's business roundup covers a wide range of topics, from the abrupt end of Aaron Rodgers' season with the Jets to central banks' strategies to combat inflation. Let's delve into the most significant highlights and their potential impacts.   Aaron Rodgers' Short-Lived Stint with the Jets Aaron Rodgers, one of the NFL's most prominent quarterbacks, saw his season with the Jets come to an abrupt end after just four plays. This unexpected turn of events has left football fans and analysts puzzled, raising questions about the future of the Jets' quarterback situation.   Google's Defense Against Anti-Competitive Practices Amid ongoing scrutiny, Google has defended itself against allegations of anti-competitive practices. The tech giant argues that its continued dominance in the search market is a result of its commitment to quality, pushing back against accusations of unfair competition.   Central Banks Pondering Higher Rates to Tackle Inflation In response to rising inflation, central banks are contemplating the possibility of keeping interest rates higher for an extended period. This strategic shift could have far-reaching implications for financial markets and economic stability.   AI Transforming iPhones and Apple Watches Artificial intelligence continues to reshape the tech landscape, with AI-driven advancements making their mark on iPhones and Apple Watches. These innovations have the potential to enhance user experiences and open up new possibilities for Apple's product lineup.   Ford's Ambitious Plans for F-150 Hybrid Pickup Production Ford is gearing up to double its production of F-150 hybrid pickups, a bold move in the electric vehicle market. As consumer demand for eco-friendly options grows, this expansion could position Ford as a key player in the hybrid vehicle sector.   Leadership Shake-Up at BP as CEO Resigns BP, one of the world's leading energy companies, faces a leadership change as its CEO steps down due to work-related relationships. This development raises questions about corporate governance and the challenges faced by major players in the energy sector.   Earnings Report Highlights While these overarching topics dominate the business landscape, it's essential to keep an eye on earnings reports from key companies. Upcoming reports from Cracker Barrel, Adobe, and Lennar will provide valuable insights into their financial performance and potential market impacts. In a rapidly changing business environment, staying informed about these developments is crucial for investors, professionals, and anyone interested in the world of finance and technology. Keep a close watch on these evolving stories as they continue to shape the business landscape. (For more in-depth analysis and insights, stay connected with our sponsor, Mercury, and their article on the metrics that VCs and investors consider when evaluating startups.)
Banks as Key Players in the Energy Renovation Wave: Navigating Challenges and Opportunities in the EPBD Recast

Vodafone's H1 2024: A Turning Point in the Telecom Giant's Struggle

Michael Hewson Michael Hewson 13.11.2023 14:40
  Vodafone H1 24 –14/11 – the Vodafone share price has been in a slow decline for the last 5 years, falling to a 25-year low, below 70p in the summer of this year. Since those lows, we've seen a slow recovery as new CEO Margherita Della Valle looks to try and turn the ailing business around. Almost all of its European businesses have proved to be a drain on the balance sheet, which makes the decision last year to reject an €11bn bid last year by Iliad for its underperforming Italian business.   That is now ancient history with the new CEO looking to focus more on the UK business, after announcing last month a €5bn deal to offload its Spanish business to Zegona for €5bn. The increased focus on the UK and German businesses has seen the company agree a deal with Hutchison Holdings take over the running of its UK Three network, while also agreeing an 18-year roaming deal with 1&1 Mobilfunk in Germany.  In Q1 the company reported revenues of €10.74bn, a decline of 4.8%, with declines in all its major markets except the UK, which saw organic services revenues rise 5.7% to £1.7bn. Germany, Italy and Spain all saw revenues decline by 1.3%, 1.6% and 3% respectively. Its smaller South Africa market managed to see a gains of 9%. For H1 revenues are expected to come in at €21.6bn with organic services of €18.4bn, a 5% decline from the same period last year, with Spain expected to see the biggest decline of -3.4%. The UK business is forecast to see a 5.78% rise in organic growth to $2.8bn.   Burberry H1 24 – 16/11 with the share price hitting record highs back in April the outlook was looking good for Burberry, with the shares getting a lift on decent returns from the likes of LVMH, Hermes and the wider luxury sector as Asia demand surged in the wake of the relaxation of lockdown measures in China at the end of last year. Those heady highs seem a long way away now given the sharp declines seen in the luxury sector in the months since then, on the back of a sharp slowdown in demand across all of its markets, and China in particular, with the shares slipping to one-year lows earlier this month. When Burberry reported in Q1 the retailer reported an 18% rise in Q1 sales, pushing quarterly revenue up to £589m, which was below consensus forecasts.   Mainland China saw an increase of 46%, while south Asia Pacific rose 39% and Japan 44%. A poor performance from its US markets saw an 8% decline and it was this that appeared to disappoint along with the fact that various other luxury retailers have reported sharp slowdowns in luxury spending that appears to have dragged the sector lower. Burberry also left full year guidance unchanged in Q1 saying that they still expected to see low double-digit revenue growth for full year 2024.       
Federal Reserve's Stance: Holding Rates Steady Amidst Market Expectations, with a Cautionary Tone on Overly Aggressive Rate Cut Pricings

Key Retail Earnings Reports: Walmart, Target, and Home Depot - Q3 2024 Analysis

Michael Hewson Michael Hewson 13.11.2023 14:43
Walmart Q3 24 – 16/11 – has been a significant stand out when it comes to the US retail sector, the shares have made strong gains this year with the shares hitting record highs earlier this month. The US consumer has held up well this year with Q3 seeing personal consumption contributing 4% to US GDP growth. There is a danger however that could be as good as it gets as we head into the final quarter of 2023 and Q4. When Walmart reported in August they crushed expectations, growing revenues, and profits. Q2 revenues rose 5.7% to $161.63bn, while profits came in at $1.84c a share. Total same-store sales rose by 6.3%, with the retailer raising its forecasts for the full year. Walmart said it expected Q3 profits to come in between $1.45 to $1.50c, while raising its full year profit forecast to between $6.36 to $6.46 from between $6.10 and $6.20 a share. Full year net sales were raised to between 4% and 4.5%. Target Q3 24 – 15/11 – while Walmart has been sweeping all before it, Target has gone in the other direction the shares slipping towards their 2020 lows, the retailer has been struggling with higher costs, and several cuts to their guidance, with management warning of "shrinkage" impacting its margins, given that several of their stores are in less salubrious geographic locations. Q2 revenues slowed to $24.38bn, falling short of expectations, although profits saw a solid increase to $1.80 a share, comfortably beating the top end of forecasts of $1.70 a share. Target also downgraded its full year profits forecast from $7.75 to $8.75 to between $7 and $8 a share. The retailer also projected Q3 profits of between $1.20 and $1.60 a share, although it is noteworthy that there has been an improvement in operating margins, which would appear to account for the better profit numbers and could prompt a surprise to the upside in this week's numbers. Q3 revenues are expected to come in at $25.1bn.   Home Depot - Q3 24 – 14/11 – in the leadup to Home Depot's Q2 numbers the share hit a 6-month high, however those gains quickly disappeared with the shares sliding to their lowest levels this year at the end of October. The sharp falls in the aftermath of the Q2 numbers were somewhat surprising given that the results came in ahead of forecasts. Back in May the company cut its full year forecasts sending the shares sharply lower. Q2 revenues saw a modest decline from last year to $42.9bn, as same store sales growth declined by -2%. Profits also beat consensus coming in at $4.65c a share. The outlook for the second half of the year is more uncertain with the company reaffirming its guidance from May for same store sales to decline between 2% and 5%. The retailer also outlined a new $15bn share buyback, however this wasn't enough to stop the shares from sliding back, with the uncertainty offered for the second half of the year perhaps the main reason for the share price weakness seen since then. Q3 revenues are expected to come in at $37.87bn, while same-store sales are expected to decline by 3%. Profits are forecast to slow to $3.82c a share.
Rates Spark: Time to Fade the Up-Move in Yields

US Market Outlook: Retail Sales, Big Retail Earnings, and Political Jitters Set the Stage

Ipek Ozkardeskaya Ipek Ozkardeskaya 16.11.2023 11:16
Back to US: retail sales, Big Retail earnings & US political jitters   Yesterday's rush to open fresh long US Treasury positions was likely intensified by a hurry to cover short positions. We shall see a correction in the US yields, as the Fed members still maintain their position for 'higher for longer' interest rates. But the market position is clear. The pricing now suggests a 50bp cut from the Fed by July next year; the sweet and sour cocktail of softening jobs market and easing inflation suggests that the Fed's next move will probably be a rate cut, rather than a rate hike.   So yes, ladies and gentlemen, the way is being paved for a potential Santa rally this year. But the Fed will continue to calm down the game, and any strength in the US economic data should reinforce the 'high for long' rhetoric and tame appetite.  Investors will watch the US retail sales data today. A strong figure could pour cold water on heated Fed cut bets. A soft figure, on the other hand, could bring in more buyers to US bond markets.   On the individual front, Home Depot shares rallied more than 5% yesterday. Earnings and revenue narrowed and the company released a cautious year-end guidance, but the results were better than expected. Target is due to report today, and Walmart on Thursday.  To add another layer of complexity – on top of the economic data and corporate earnings – the US political scene will impact bond pricing in the next few days. The US politicians try to avoid a government shutdown by Friday. The latest news suggests that the odds of shutdown diminished yesterday as House Speaker Mike Johnson gained more Democratic support for his interim funding plan. The interim plan however excludes aid for Ukraine, aid for Israel and could lead to a two-step shutdown at the start of next year. And it does not include the steep spending cuts that the hardcore Republicans are looking for. In summary, the political mess continues.   In the best-case scenario, the US politicians will agree on another short-term relief package and avoid a government shutdown, push away the threat of another rating cut – from Moody's this time. The latter would maintain appetite in US bonds and support a further rally in the US stocks. In the worst-case scenario, the US government will stop its operations by the end of this week and the political chaos will lead to a bounce in US yields and stall the equity rally.   
Rates Spark: Time to Fade the Up-Move in Yields

US Market Outlook: Retail Sales, Big Retail Earnings, and Political Jitters Set the Stage - 16.11.2023

Ipek Ozkardeskaya Ipek Ozkardeskaya 16.11.2023 11:16
Back to US: retail sales, Big Retail earnings & US political jitters   Yesterday's rush to open fresh long US Treasury positions was likely intensified by a hurry to cover short positions. We shall see a correction in the US yields, as the Fed members still maintain their position for 'higher for longer' interest rates. But the market position is clear. The pricing now suggests a 50bp cut from the Fed by July next year; the sweet and sour cocktail of softening jobs market and easing inflation suggests that the Fed's next move will probably be a rate cut, rather than a rate hike.   So yes, ladies and gentlemen, the way is being paved for a potential Santa rally this year. But the Fed will continue to calm down the game, and any strength in the US economic data should reinforce the 'high for long' rhetoric and tame appetite.  Investors will watch the US retail sales data today. A strong figure could pour cold water on heated Fed cut bets. A soft figure, on the other hand, could bring in more buyers to US bond markets.   On the individual front, Home Depot shares rallied more than 5% yesterday. Earnings and revenue narrowed and the company released a cautious year-end guidance, but the results were better than expected. Target is due to report today, and Walmart on Thursday.  To add another layer of complexity – on top of the economic data and corporate earnings – the US political scene will impact bond pricing in the next few days. The US politicians try to avoid a government shutdown by Friday. The latest news suggests that the odds of shutdown diminished yesterday as House Speaker Mike Johnson gained more Democratic support for his interim funding plan. The interim plan however excludes aid for Ukraine, aid for Israel and could lead to a two-step shutdown at the start of next year. And it does not include the steep spending cuts that the hardcore Republicans are looking for. In summary, the political mess continues.   In the best-case scenario, the US politicians will agree on another short-term relief package and avoid a government shutdown, push away the threat of another rating cut – from Moody's this time. The latter would maintain appetite in US bonds and support a further rally in the US stocks. In the worst-case scenario, the US government will stop its operations by the end of this week and the political chaos will lead to a bounce in US yields and stall the equity rally.   
Navigating Uncertainty: Insights into U.S. Yields, Equities, and the Nvidia Conundrum

Navigating Uncertainty: Insights into U.S. Yields, Equities, and the Nvidia Conundrum

Ipek Ozkardeskaya Ipek Ozkardeskaya 16.11.2023 12:01
Therefore, the US 2-year yield may have bottom at 4.80% level and should be headed back toward 5%. The US 10-year yield should hold ground above 4.50%. As per equities, the direction is unclear to everyone, but the recent dovish shift in Fed expectations and the dropping yields gave a great energy boost to the US stocks. The S&P500 jumped more than 10% since end of October, the rate-sensitive Nasdaq 100 is now flirting with the highest levels since summer while the Russell 2000 index is having a blast since its October dip. The index rallied almost 12% in 3 weeks, pulled out the 50-DMA, the major 38.2% Fibonacci retracement and consolidated gains in the medium-term bullish consolidation zone yesterday.   As equities move higher and inflation slows, the anxiety regarding short positions mount – hence short covering is adding to the positive pressure.   The Big Short's Micheal Burry reportedly exited his short position against SPDR's P&P500 and Invesco's QQQ and began betting against semiconductor stocks, including Nvidia.   Nvidia, on the other hand, is flirting with its ATM levels near the $500 per share level. A quick glance at Nvidia's long-term price chart clearly suggests that the chances are that we are in the middle of an AI-led bubble and that the exponential move cannot extend infinitely. Yes, AI is boosting Nvidia's revenue and profits, but the revenues that will flow into the pockets of Nvidia thanks to AI are already embedded in the share price, and we will likely see the price bubble burst. But there are two things to keep in mind when you bet against a bubble. 1. A bubble is a bubble only when it bursts – it's like 'you are innocent until proven guilty'. And 2. You can wait a while before the market comes back to its senses. For now, we are in the middle of making eye-popping predictions and beating them. The company is due to release earnings on November 21st.  One big risk for Nvidia is the tense relations between the US and China, and the extension of chip export curbs to a bigger range of Nvidia chips. This week's meeting between Biden and Xi carried hope that the high-level communication could help melting ice. There has apparently been some 'real progress' in restoring military communication and foreign policy... Then, Joe Biden said that Xi is a dictator.
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Netflix Surges: A Boost to Market Confidence Amid Global Economic Uncertainty

Ipek Ozkardeskaya Ipek Ozkardeskaya 25.01.2024 15:01
Netflix beats By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank   Netflix jumped 8% in the afterhours trading as its revenue and new subscriptions topped estimates. More than 13 mio people decided that Netflix was worth paying for, and the number of total paid subscribers rose past 260 mio. The password sharing ban has been a boon for the company. The only thing they regret is not having thought about it before.   Strong Netflix results will likely give a positive spin to the major US indices which were slow to move yesterday after the Richmond manufacturing index came in much lower than expected.  In the sovereign space, a mixed 2-year bond auction in the US hinted at declining optimism from the Federal Reserve's (Fed) dovish camp, but a jump from foreign buyers pulled the US 2-year yield lower. The 10-year yield remains steady above the 4.10% and will hopefully cross back above the 2-year yield after having stayed inverted for more than a year-and-a-half as the US soft-landing scenario is given more weight despite the slow manufacturing numbers as US consumer spending remains strong and helps keeping the US economy afloat. The US will release its latest GDP update tomorrow and is expected to print a decent 2% growth for the last quarter.   Robust US economic growth, strong earnings and prospects of lower Fed rates remain supportive of equity valuations, although the ATH levels and near-overbought market conditions in the S&P500 call for – at least – a minor correction in the short run. Today, Tesla will be reporting its latest Q4 results after the bell, and the results will unlikely be as enchanting as Netflix'. But overall, investors don't want to miss the US stocks' rally to fresh highs. And if the trend is your friend, well, the trend is clearly positive.  In China, though, sentiment is the exact opposite. Chinese stocks saw a little bump yesterday on the announcement of a $278bn rescue package to lift the Chinese stocks up. But skepticism reigned as 1. the rescue package was found to be a bit meagre compared with around $6 trillion of market value wiped off the value of Chinese and Hong Kong stocks in past 3 years. 2. The rescue package doesn't solve the underlying fundamental problems, namely slowing economic growth, a serious property crisis and slowing population. And 3. No one can guarantee a consistent action plan from the Xi government in the medium to long run. The ruthless government crackdown and extreme Covid measures are responsible for a severe confidence loss. And the market reaction to Chinese measures prove that you can't buy confidence.   In the FX, the US dollar index is testing the 200-DMA to the upside. Parallelly, the EURUSD is testing its 200-DMA support to the downside. Today's PMI data and tomorrow's European Central Bank (ECB) decision will likely help provide fresh direction to the pair. Fading inflation, sputtering European economies and ECB Chief Lagarde's latest words in Davos hint that the ECB is preparing for a summer rate cut. More clarity on the ECB's rate cut plans could provide a green light for a sustainable move below the 200-DMA. Elsewhere, the Bank of Canada (BoC) meets today and is expected to maintain rates unchanged. The Loonie remains under the pressure of limited appetite for oil.  Speaking of oil, US crude's inability to clear the $75pb offers is intriguing despite news that would normally be positive for oil prices – like the geopolitical tensions in regions where oil is pumped and transported, and the US API data showing a 6.7-mio barrel slump in weekly oil inventories. The next decisive move in oil prices should be a positive breakout. 

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